Government Spendinghttp://www.businessinsider.com/category/government-spending
en-usMon, 19 Mar 2018 11:35:16 -0400Mon, 19 Mar 2018 11:35:16 -0400The latest news on Government Spending from Business Insiderhttp://static3.businessinsider.com/assets/images/bilogo-250x36-wide-rev.pngBusiness Insiderhttp://www.businessinsider.com
http://www.businessinsider.com/an-economist-explains-why-we-have-a-debt-ceiling-2017-7An economist explains why we have a debt ceiling and why it’s time to get rid of ithttp://www.businessinsider.com/an-economist-explains-why-we-have-a-debt-ceiling-2017-7
Sat, 22 Jul 2017 10:33:00 -0400Steven Pressman
<p><img style="float:right;" src="http://static2.businessinsider.com/image/5970f4efc50c2931008b583a-2400/rtr3foba.jpg" alt="RTR3FOBA" data-mce-source="Jonathan Ernst/Reuters" /></p><p><em>Editor's note: The U.S. government<span>&nbsp;</span><a href="http://www.cnbc.com/2017/03/27/there-is-no-debt-ceiling-crisis-at-least-for-now.html">maxed out</a><span>&nbsp;</span>its credit card in March and has been moving money around ever since to avoid running out of cash. But very soon we will reach the limits of this financial sleight of hand, and Congress will have to either raise the<span>&nbsp;</span><a href="https://www.treasury.gov/initiatives/Pages/debtlimit.aspx">debt ceiling</a><span>&nbsp;</span>&ndash; currently about US$19.8 trillion &ndash; or suffer the consequences. Economist Steve Pressman explains why we have a ceiling and why it's time to get rid of it.</em></p>
<h2><strong>What is the debt ceiling?</strong></h2>
<p>Just like the rest of us, governments must borrow when they spend more money than they receive. They do so by issuing a bond or IOU with a promise to repay and make regular interest payments. Government debt is the total sum of all this borrowed money.</p>
<p>The debt ceiling, which<span>&nbsp;</span><a href="https://www.senate.gov/CRSpubs/d2c8f833-9796-4b3e-9462-6b1755ef463d.pdf">Congress established</a><span>&nbsp;</span>a century ago, is the maximum amount the government can borrow. In other words, it's the limit on the national credit card.</p>
<h2><strong>How much has the US government borrowed and from whom?</strong></h2>
<p>Currently,<span>&nbsp;</span><a href="https://fred.stlouisfed.org/series/GFDEBTN">U.S. government debt</a><span>&nbsp;</span>is $19.8 trillion, a tad more than the<span>&nbsp;</span><a href="https://fred.stlouisfed.org/series/GDP">size of our economy</a>.</p>
<p>Around one-third of this money the government actually owes itself. The Social Security Administration, which has accumulated a surplus since it was first set up in the 1930s, has invested all of this extra money in government bonds and<span>&nbsp;</span><a href="https://www.ssa.gov/cgi-bin/investheld.cgi">currently owns $5 trillion worth</a>. Separately, the Federal Reserve<span>&nbsp;</span><a href="https://fred.stlouisfed.org/series/TREAST">holds about $2.5 trillion</a><span>&nbsp;</span>in U.S. Treasuries.</p>
<p>The rest is considered public debt. As of March,<span>&nbsp;</span><a href="http://ticdata.treasury.gov/Publish/mfh.txt">foreign countries, companies, and individuals</a><span>&nbsp;</span>own $6 trillion of U.S. government debt. Japan and China are the largest holders with $1.1 trillion each. The rest is owed to U.S. citizens and businesses, as well as state and local governments.</p>
<p><img src="http://static4.businessinsider.com/image/5970f6c8c50c291d008b5890-2400/gettyimages-3426868.jpg" alt="GettyImages 3426868" data-mce-source="Topical Press Agency/Getty Images" /></p>
<h2><strong>Why is there a debt ceiling?</strong></h2>
<p>Before 1917, Congress would authorize the government to borrow a fixed sum of money for a specified term. When each loan expired, the government could not borrow again until authorized to do so.</p>
<p>That changed with the Second Liberty Bond Act of 1917, which<span>&nbsp;</span><a href="https://www.federalreservehistory.org/essays/liberty_bonds">created the debt ceiling</a>. This allowed for a continual rollover of debt without congressional approval of every loan.</p>
<p>Congress approved this measure because it enabled then-President Woodrow Wilson to spend the money he deemed necessary to fight World War I without waiting for often absent lawmakers to act. Congress, however, did not want to write the president a blank check, so it limited borrowing to $11.5 billion, requiring legislation for any increase.</p>
<p>During the subsequent century, the debt ceiling<span>&nbsp;</span><a href="https://fas.org/sgp/crs/misc/RL31967.pdf">has been increased many times</a>, including 78 times<span>&nbsp;</span><a href="https://www.treasury.gov/initiatives/Pages/debtlimit.aspx">since 1960 alone</a>. The last change occurred in March 2015, when Congress decided to suspend the limit for two years. When that<span>&nbsp;</span><a href="http://wric.com/2017/03/19/debt-limit-goes-back-into-effect-at-level-near-20-trillion/">legislation expired</a><span>&nbsp;</span>on March 16, 2017, U.S. debt stood at $19.8 trillion, which became the new limit.</p>
<h2><strong>How has the government paid its bills since then without incurring new debt?</strong></h2>
<p>The U.S. government generally spends more than it takes in (<a href="https://www.thebalance.com/current-u-s-federal-budget-deficit-3305783">$440 billion more in fiscal year 2017</a>), yet since March 16 it can no longer borrow more money to make up the difference. It can spend only cash on hand. As a result, Treasury Secretary Steven Mnuchin has used "<a href="https://www.budget.senate.gov/imo/media/doc/Debt-Limit%20Extraordinary%20Measures%20BB030917.pdf">extraordinary measures</a>" to conserve cash.</p>
<p>For example, he<span>&nbsp;</span><a href="https://www.treasury.gov/initiatives/Documents/Description_of_Extraordinary_Measures_2017_03_16.pdf">stopped funding retirement programs</a><span>&nbsp;</span>for government employees so the money can be used to meet other obligations without breaching the debt limit. The expectation is that once the debt ceiling is raised, the government will make up for underfunding employees' plans.</p>
<p>These measures, along with the annual surge in tax payments in April that gave the federal government a<span>&nbsp;</span><a href="https://www.fiscal.treasury.gov/fsreports/rpt/mthTreasStmt/mts0417.pdf">$182 billion surplus</a><span>&nbsp;</span>for that month, have enabled the government to pay its other bills. As of July 17, the Treasury<span>&nbsp;</span><a href="https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&amp;fname=17071700.txt">had $201.4 billion in cash</a>.</p>
<p>But it is not clear how long this money will last. Expenditures and revenues fluctuate considerably, and $200 billion can disappear in weeks.</p>
<p><img src="http://static5.businessinsider.com/image/5970f649552be5b6088b5809-2400/rts19605.jpg" alt="RTS19605" data-mce-source="Kevin Lamarque/Reuters" /></p>
<p>The<span>&nbsp;</span><a href="https://bipartisanpolicy.org/blog/bpc-narrows-x-date-forecast-to-early-to-mid-october/">Bipartisan Policy Center</a><span>&nbsp;</span>and the<span>&nbsp;</span><a href="https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/52837-debtlimit.pdf">Congressional Budget Office</a><span>&nbsp;</span>estimate that the U.S. will run out during the first two weeks of October, although they warn the country's coffers could be empty earlier. With Congress scheduled to take a<span>&nbsp;</span><a href="https://www.senate.gov/artandhistory/history/common/generic/News_August_Recess.htm">recess in August through Labor Day</a>, something must be done soon.</p>
<p>When the cash is gone, decisions will have to be made about who gets paid and who doesn't. Government employees or contractors may not get paid in full. Loans to small businesses, exporters or college students may stop. These actions will all lower spending and slow economic growth.</p>
<p>One difficult choice would be whether to prioritize foreign owners of our debt or first honor domestic obligations (including American bondholders).<span>&nbsp;</span><a href="http://www.nationalreview.com/article/271329/constitutional-nonsense-debt-john-berlau">Some argue</a><span>&nbsp;</span>we're legally obligated to pay all debt holders first, or that doing this<span>&nbsp;</span><a href="http://thehill.com/blogs/floor-action/house/298767-house-approves-debt-ceiling-contingency-plan">is more important</a><span>&nbsp;</span>than paying other bills, but<span>&nbsp;</span><a href="http://www.dorfonlaw.org/2011/07/obligation-is-debt-that-must-be-paid.html">most</a><span>&nbsp;</span><a href="http://www.npr.org/2013/10/07/229856550/in-a-debt-crisis-u-s-may-have-to-decide-payment-priorities">people</a><span>&nbsp;</span>contend that all creditors need to be treated equally.</p>
<p><a href="http://www.pbs.org/newshour/bb/politics-july-dec13-debtceiling_10-03/">Some pundits</a><span>&nbsp;</span>have claimed that a government default would have dire economic consequences &ndash; soaring interest rates, markets in panic, and an economic depression. But such fears are overblown, not because an actual default wouldn't be catastrophic, but because once markets start panicking, Congress would likely end the game of chicken they are playing with the debt ceiling &ndash; just as<span>&nbsp;</span><a href="http://www.nytimes.com/2013/10/17/us/congress-budget-debate.html">it did in 2013</a>. And even if it technically defaulted, the immediate turmoil would be so severe that Congress would swiftly act to reverse the damage.</p>
<p>Mnuchin<span>&nbsp;</span><a href="https://www.washingtonpost.com/news/wonk/wp/2017/06/09/u-s-readying-plans-and-backup-plans-if-debt-ceiling-isnt-raised-soon-mnuchin-says/?utm_term=.a8819c467d5f">has said</a><span>&nbsp;</span>he has "plans and backup plans" to find cash and enable the government to pay its bills, for at least a little while longer. For example, the U.S. could sell off some of its<span>&nbsp;</span><a href="https://www.fiscal.treasury.gov/fsreports/rpt/goldRpt/current_report.htm">$11 billion in gold</a><span>&nbsp;</span>or even shut down temporarily, which it also did in 2013.</p>
<p>This would buy Congress a little more time to act &ndash; or react to the plunging stock market that results. That's what happened in August 2011 when<span>&nbsp;</span><a href="http://money.cnn.com/2011/08/05/news/economy/downgrade_rumors/index.htm">Standard &amp; Poor's downgraded Uncle Sam's AAA credit rating</a><span>&nbsp;</span>for the first time ever after brinkmanship over the debt ceiling. Congress quickly caved and raised it.</p>
<p>I expect the same to happen this year. Some Republicans will want to hold the line on spending, while Democrats (required to overcome a filibuster in the Senate) will likely push for more. In the end, they'll do what they always do &ndash; perhaps after Wall Street gives them a push &ndash; and kick the can a few more miles down the road.</p>
<h2><strong>Is there a better way to deal with our debt?</strong></h2>
<p>The U.S. is one of<span>&nbsp;</span><a href="https://www.investmentfrontier.com/2013/10/08/7-countries-with-debt-ceilings-or-limits">very few countries with a debt ceiling</a>. Other governments operate effectively without it.</p>
<p>We can too. Having a debt ceiling is actually dysfunctional. It makes it harder for the Treasury to pay bills when they come due.</p>
<p>The best solution would be to just scrap the ceiling. Congress already approved the spending and the tax laws that require more debt; it shouldn't have to approve the additional borrowing as well.</p>
<p>It is also worth remembering that the original debt ceiling was put in place because Congress could not meet quickly and approve any needed spending to fight a war. In 1917, when cross-country travel was by rail, requiring days to get to Washington, this made some sense.</p>
<p>Today, not so much.</p>
<script type="text/javascript" src="https://theconversation.com/javascripts/lib/content_tracker_hook.js" id="theconversation_tracker_hook" data-counter="https://counter.theconversation.edu.au/content/79637/count?distributor=republish-lightbox-advanced" async="async"></script><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/r-congress-must-raise-debt-ceiling-by-mid-october-cbo-2017-6" >CBO says Congress has until mid-October to raise the debt ceiling and avoid an economic disaster</a></strong></p>
<p><a href="http://www.businessinsider.com/an-economist-explains-why-we-have-a-debt-ceiling-2017-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/cut-cable-directv-now-streaming-cord-cutting-youtube-tv-hulu-sling-2018-3">I quit cable for DirecTV Now and it's saving me over $1,000 a year — here's how I did it</a></p> http://www.businessinsider.com/london-and-the-south-east-effectively-provide-subsidies-to-rest-of-britain-2017-5New figures show just how much the UK relies on London taxpayershttp://www.businessinsider.com/london-and-the-south-east-effectively-provide-subsidies-to-rest-of-britain-2017-5
Wed, 24 May 2017 04:25:01 -0400Will Martin
<p><img style="float:right;" src="http://static6.businessinsider.com/image/58de13e9dd0895ea7f8b47b2-870/undefined" alt="A spectator, wearing a suit with Union flag design, looks on during the final of the 2013 Ladbrokes.com World Darts Championship at the Alexandra Palace on January 1, 2013 in London, England. (Photo by )" data-mce-source="Ben Hoskins/Getty Images" data-mce-caption="Someone's excited for GDP day..." data-link="http://www.gettyimages.co.uk/license/158859187"></p><p>LONDON — London and the South East, broadly speaking the UK's most affluent regions, provide significant subsidies to the rest of the UK, according to f<a href="https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/articles/countryandregionalpublicsectorfinances/2015to2016">igures released on Tuesday by the Office for National Statistics</a>.</p>
<p>The regions bring in proportionately much higher tax revenues than they cost the government in terms of public spending per person.</p>
<p><a href="https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/articles/countryandregionalpublicsectorfinances/2015to2016">On average,</a> tax revenues in the capital equate to <span>£15,756 per person, compared to public spending of £12,686 per person. In the South East region, taxes were equivalent to £12,249, while public spending averaged at £10,582. </span></p>
<p><span>All numbers are from the financial year ending in March 2016.</span></p>
<p><span>Only one other region, the East of England, brought in more taxes than was spent per person, with a gap of £242 between the average tax revenue of £10,833 and the spend of £10,591.</span></p>
<p><span>In every other region of the country, ONS figures showed, government spending is higher per person than tax revenues. This was most pronounced in Northern Ireland, where the net fiscal deficit per person — essentially the gap between tax revenues and public spending — was £5,440. </span></p>
<p><span>The chart below, tweeted by Financial Times Economics Editor Chris Giles on Tuesday morning, shows just how big the gap in tax/spending terms between London and the rest of the country truly is:</span></p>
<div>
<blockquote class="twitter-tweet" data-lang="en" data-cards="" data-conversation="">
<p lang="en" dir="ltr">
<a href="https://twitter.com/ONS">@ONS</a> So Londoners give up on average £3,000, while people in the North East gain on average more. And Northern Ireland even more <a href="https://t.co/i0yELXyAkJ">pic.twitter.com/i0yELXyAkJ</a> </p>— Chris Giles (@ChrisGiles_) <a href="https://twitter.com/mims/statuses/866964261272158209">May 23, 2017</a>
</blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
</div>
<p> <span>Overall, the ONS said, Britain borrowed £72.1 billion in the 2015-2016 financial year, equivalent to £1,108 per person.</span></p>
<p>ONS data on regional tax revenues and spending was released on Tuesday morning alongside wider figures for the UK's total public sector net borrowing. <a href="http://uk.businessinsider.com/uk-public-sector-net-borrowing-in-april-2017-2017-5"><span>Public sector net borrowing increased by £1.2 billion in April compared to the same time in 2016, </span>the latest figures showed.</a></p>
<p>"Public sector net borrowing (excluding public sector banks) increased by £1.2 billion to £10.4 billion in April 2017, compared with April 2016; this is the highest April borrowing since 2014," the ONS said in a data release.</p>
<p>Economists polled before the release forecast a deficit of £8.9 billion.</p>
<p>While on a monthly basis the deficit increased, the deficit fell <span>on an annualised basis </span>in the financial year ending in March compared to the end of March 2016.</p>
<p>"Public sector net borrowing (excluding public sector banks) decreased by £23.4 billion to £48.7 billion in the financial year ending March 2017 (April 2016 to March 2017), compared with the financial year ending March 2016," the ONS said.</p>
<p>That marks the lowest net borrowing in the UK since March 2008, just before the worst of the financial crisis hit the UK.</p><p><a href="http://www.businessinsider.com/london-and-the-south-east-effectively-provide-subsidies-to-rest-of-britain-2017-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/goldman-sachs-sharmin-mossavar-rahmani-investment-outlook-valuations-inflation-bitcoin-2018-2">Goldman Sachs is telling its multimillionaire clients not to worry about valuations or inflation</a></p> http://www.businessinsider.com/the-federal-spending-wastebook-documents-government-spending2017-1The federal spending ‘Wastebook’ is outrageous in more ways than onehttp://www.businessinsider.com/the-federal-spending-wastebook-documents-government-spending2017-1
Tue, 10 Jan 2017 21:19:00 -0500Rob Garver
<p><img style="float:right;" src="http://static4.businessinsider.com/image/5875616eee14b63e338b5fe1-604/screen shot 2017-01-10 at 23123 pm.png" alt="Wastebook Jeff Flake" data-mce-source="Office of Sen. Jeff Flake" data-mce-caption="Arizona Sen. Jeff Flake produced this year's annual 'Wastebook.'" data-link="http://www.flake.senate.gov/public/_cache/files/4fcf3486-328a-40de-a1cc-f88515002d0d/wastebook-2016-final-pdf.pdf" /></p><p></p>
<p>Retired Oklahoma Sen. Tom Coburn was always going to be a tough act to follow when it came to producing the colorful &ldquo;Wastebook&rdquo; that he and his staff produced every year to document what they saw as profligate government spending.</p>
<p>But Arizona Sen. Jeff Flake, who inherited the Wastebook when Coburn retired after the 2014 edition, is definitely trying hard. Maybe too hard.</p>
<p>This year&rsquo;s edition, released Tuesday, is titled &ldquo;Porkemon Go&rdquo; and features a cartoon version of Flake on the front, dressed as the character Ash Ketchum from the Pokemon series. It follows on last year&rsquo;s version, &ldquo;Wastebook 2015: The Farce Awakens&rdquo; which took the film from the Star Wars franchise as its theme.</p>
<p>The collection of supposed outrages has always been couched in terms of fiscal responsibility, and this year&rsquo;s version is no different. &ldquo;Within mere days, the national debt will top $20 trillion, the largest amount ever owed by any nation in history, and the federal government&rsquo;s authority to borrow expires in March,&rdquo; Flake writes in the introduction. &ldquo;But rather than making a long overdue resolution to be fiscally responsible, the promises from Washington are to spend even more.&rdquo;</p>
<p><img src="http://static4.businessinsider.com/image/57753bd54321f171088b52d0-2400/ap717396888571.jpg" alt="Jeff Flake" data-mce-source="AP Photo/Jacquelyn Martin" data-mce-caption="Jeff Flake." /></p>
<p>He continues, &ldquo;As an example, this past year the outgoing Administration requested that Congress provide billions of dollars in additional money to pay for efforts to address the spread of Zika, a virus transmitted by mosquitoes that can cause birth defects. At the same time, the nation&rsquo;s most prestigious science agencies were squandering resources already available by investigating matters most would consider obvious or even absurd.&rdquo;</p>
<p>The Wastebook is a complicated subject to write about objectively. Heavy on snark and mockery, it identifies dozens of examples of obscure federal spending, many of which are objectively wasteful or corrupt. But it also has a history of&nbsp;<a href="http://www.thefiscaltimes.com/2016/06/01/Grantees-Say-Sen-Jeff-Flake-s-Waste-Book-Waste-Taxpayer-Money">ridiculing scientific research grants</a>&nbsp;by describing them in narrowest possible way, often omitting their connection to a larger field of legitimate research.</p>
<p>Grantees have also criticized him for vastly inflating the amount of money that was spent on specific studies, or using misleading descriptions of programs to generate anger at the government.</p>
<p>This year&rsquo;s version looks as though part of it could be subjected to similar criticism. For example, one supposed outrage is that several liquor stores have taken advantage of a Department of Agriculture program to support rural businesses&rsquo; effort to install energy efficient lighting.</p>
<p>The section, titled &ldquo;Getting Lit at the Liquor Store&rdquo; complains that the $5,000 grant to the Newberry Liquors store in Newberry, Florida, went to an establishment that, &ldquo;In addition to liquor, wine, and beer ... also serves cigarettes and tobacco products.&rdquo;</p>
<p><img src="http://static6.businessinsider.com/image/50c9f9326bb3f74d36000024-2400" alt="Tom Coburn" data-mce-source="AP" /></p>
<p>The section flags several other liquor stores that also benefited from the program, creating the suggestion that the program is specifically aimed at them. The truth, though, is that thousands of rural businesses benefit from the Rural Energy for America Program, from family farms to supermarkets.</p>
<p>The Wastebook barely acknowledges that fact at the end of the section, with the throwaway line, &ldquo;Taxpayers should not have to subsidize the lighting or electricity costs of liquor stores or other businesses&rdquo; -- where &ldquo;other businesses&rdquo; represents the overwhelming majority of the program&rsquo;s beneficiaries.</p>
<p>A quick read of the report would also suggest that the Oregon Museum of Science and Industry was given a $150,000 federal grant to develop &ldquo;earthquake-proof gingerbread houses.&rdquo;</p>
<p>Once past the headline, the write-up of the study at least acknowledges that the holiday-themed gingerbread program was aimed at engaging mostly younger visitors with the principles of engineering in an accessible manner. But what the book doesn&rsquo;t do is point out that the $150,000 grant was provided&nbsp;<a href="https://www.imls.gov/grants/awarded/ma-10-16-0340-16">to fund a series of three different exhibits</a>, of which the gingerbread-themed program appears to have been just one.</p>
<p>On page 137 of the Wastebook, after 50 examples of supposed government profligacy comes the disclaimer, &ldquo;The best effort was made to determine the precise cost of the activity, product or service profiled in an entry paid for with taxpayer funds.</p>
<p>However, in some cases the exact amount spent was not tracked by the agency, could not be determined, or was spent over a number of years, including future years. Therefore, the amount provided may be the total amount budgeted for the program or grant profiled rather than for the specific purpose highlighted.&rdquo;</p>
<p><img src="http://static6.businessinsider.com/image/572517f291058427008c0066-2400/gop 2016 trump congremill-2.jpg" alt="Jeff Flake" data-mce-source="AP Photo/Andrew Harnik, File" data-mce-caption="In this March 9, 2016, file photo, Sen. Jeff Flake, R-Ariz., on Capitol Hill in Washington." /></p>
<p>None of this is to say that the Wastebook doesn&rsquo;t identify some pretty iffy government projects.</p>
<p>For example, Flake&rsquo;s researchers identified a &ldquo;spaceport&rdquo; in Alaska that continues to receive government funding from the Department of Defense despite the fact that it hasn&rsquo;t been used in years, and appears to be in a serious state of disrepair.</p>
<p>Another is a Florida municipal planning authority that has apparently spent hundreds of thousands of dollars on dubious projects that include golf tournaments and dragon boat races.</p>
<p>And there is no shortage of scientific studies that -- at least presented the way they are by Flake&rsquo;s writers --&nbsp;<em>seem</em>&nbsp;pretty absurd. There are fish on treadmills, lustful monkeys and surfing cats. But in many cases, the authors of the book don&rsquo;t really give the recipients of the grants the opportunity to explain themselves.</p>
<p>That might have been a better use of their time than composing really dreadful paragraphs like this one, complaining about funding for a fishing museum in Massachusetts:</p>
<p>&ldquo;By reeling in $32,000 from two different agencies, the fledgling Fishing Heritage Center proves that catching government grants is like shooting fish in a barrel. Both grants are supporting efforts to bait tourists to the area by telling fish tales.&rdquo;</p><p><a href="http://www.businessinsider.com/the-federal-spending-wastebook-documents-government-spending2017-1#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/why-nasa-has-not-sent-humans-to-mars-2018-2">The surprising reason why NASA hasn't sent humans to Mars yet</a></p> http://www.businessinsider.com/palantir-claims-victory-lawsuit-against-us-army-2016-10$20 billion startup Palantir has claimed victory in its unusual lawsuit against the US Armyhttp://www.businessinsider.com/palantir-claims-victory-lawsuit-against-us-army-2016-10
Mon, 31 Oct 2016 14:22:21 -0400Julie Bort
<p><img style="float:right;" src="http://static1.businessinsider.com/image/573282cc910584716f8c1e32-2400/gettyimages-495486464.jpg" alt="Peter Thiel" data-mce-source="Neilson Barnard/Getty Images for New York Times" data-mce-caption="Founders Fund partner Peter Thiel." /></p><p>On Monday, big-data startup Palantir claimed victory in its unusual lawsuit against the U.S. Army.</p>
<p>Palantir has sued the US Army, alleging the Army was using a biased bidding process.</p>
<p>It argued that the way the US Army&nbsp;wrote its&nbsp;requests for proposal to build the Army's next-generation intelligence system, the Distributed Common Ground System,&nbsp;lent itself to the Army's favorite&nbsp;go-to military contractors and basically precluded existing&nbsp;commercial products such as Palantir's.</p>
<p>The judge's verbal ruling on Monday for the most part&nbsp;agreed, and put Palantir back in the running to win a project that could be worth <a href="https://www.bloomberg.com/news/articles/2016-06-20/palantir-tells-u-s-army-it-intends-to-sue-over-software-bidding">over $200 million&nbsp;dollars.&nbsp;</a></p>
<p><span>The ruling was issued verbally on Monday. U.S. Court of Federal Claims Judge Marian Blank Horn said in Washington during a hearing,<a href="https://www.bloomberg.com/news/articles/2016-10-31/palantir-wins-legal-battle-over-army-combat-data-system"> as Bloomberg's&nbsp;Andrew Harris reports:</a></span></p>
<p>&ldquo;You do have to follow the dictates of the statute. The statute is not meaningless.&rdquo;</p>
<p>While lots of companies file complaints after a government contract is awarded, this suit is unusual because it is challenging the bidding process itself before the next phase of the contract is awarded, <a href="https://www.bloomberg.com/news/articles/2016-06-20/palantir-tells-u-s-army-it-intends-to-sue-over-software-bidding">Bloomberg's Lizette Chapman reports</a>.&nbsp;Palantir sued in June.&nbsp;</p>
<p>The Army has been developing this&nbsp;system for more than&nbsp;15 years, at a cost of more than $6 billion, Harris reports. In <a href="https://cases.justia.com/federal/district-courts/federal-claims/cofce/1:2016cv00784/32952/69/0.pdf">Court documents,</a>&nbsp;Palantir argued that the Army was behaving wrongfully by "refusing to allow Palantir to bid, by resisting innovation, by insisting on the failed approach of DCGS-A1."&nbsp;</p>
<p>It also said in its complaint, "These DCGS program owners seem more intent on protecting their own failed program than on adopting a far superior commercially available technology that has been proven to work."</p>
<p>One of Palantir's lawyers,&nbsp;Hamish Hume, a partner in the law firm of Boies, Schiller &amp; Flexner, said in an emailed statement.</p>
<p style="padding-left: 30px;">"This is a landmark ruling that breathes life into a law that has been ignored for far too long. As the Court held, the law requires the government to make every effort to acquire the best available commercial technology, rather than try to reinvent technology that already exists. This decision is a victory for taxpayers, whose money has been routinely wasted on lengthy and ineffective development efforts. Secretary of Defense Ash Carter and Secretary of the Army Eric Fanning have called on the Pentagon to embrace innovation, not resist it, and this court ruling gives innovators like Palantir a fair chance to compete."</p>
<p>Palantir is a startup co-founded&nbsp;by venture capitalist billionaire Peter Thiel, a man whose political views have been at the center of some controversies over the years. That includes encouraging young people to <a href="http://thielfellowship.org/">skip the expense of college and found startups</a>&nbsp;&nbsp;backing<a href="http://www.businessinsider.com/silicon-valley-seasteading-institute-2016-9"> a floating, isolated city,</a>&nbsp;and secretly bankrolling <a href="http://www.businessinsider.com/peter-thiel-gawker-sale-2016-8">Terry Bollea (Hulk Hogan's) lawsuit</a>&nbsp;that sent Gawker into bankruptcy. He famously identifies himself as a Libertarian and he's an ardent and <a href="http://www.businessinsider.com/peter-thiel-isnt-only-one-in-silicon-valley-supporting-trump-2016-10">vocal supporter of Donald Trump.</a></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/blackline-therese-tucker-makes-history-millions-ipo-2016-10" >This 55-year-old woman made history and $140 million by taking her tech company public on Friday</a></strong></p>
<p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/this-woman-travels-the-world-on-weekends-for-less-than-1000-a-trip-2016-10" >This 23-year-old travels the world on weekends for under $1,000/trip to prove you don't need much time or money to travel</a></strong></p>
<p><a href="http://www.businessinsider.com/palantir-claims-victory-lawsuit-against-us-army-2016-10#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/rise-and-fall-of-hooters-airline-myrtle-beach-bob-brooks-atlanta-airplanes-2018-2">The rise and fall of Hooters Air — the airline that lost the 'breastaurant' $40 million</a></p> http://www.businessinsider.com/pentagon-allowed-almost-1-million-in-casino-charges-2016-8REPORT: Department of Defense employees rang up over $1 million in casino and strip club charges with no serious repercussionshttp://www.businessinsider.com/pentagon-allowed-almost-1-million-in-casino-charges-2016-8
Tue, 30 Aug 2016 16:31:00 -0400Jeremy Berke
<p><img style="float:right;" src="http://static1.businessinsider.com/image/55d729fdbd86ef17008b4e41-2400/rtx1hp9i.jpg" alt="chips gambling betting casino" data-mce-source="Erik de Castro/Reuters" data-mce-caption="Making a huge bet." /></p><p></p>
<p>Department of Defense personnel racked up over $1 million in casino and "adult entertainment" charges on their Pentagon-approved cards, according to a new <a href="http://www.dodig.mil/pubs/documents/DODIG-2016-127.pdf">report</a> from the department's inspector general.</p>
<p>Defense Department personnel charged the government for 900 "adult entertainment transactions," totaling $96,576, and 4,437 casino transactions, totaling $952,258.</p>
<p>The report also says the department did not take "appropriate action" over the misuse of the cards. An audit of 30 cardholders who had the highest dollar amounts of "high-risk transactions" found that "no action" was taken to eliminate further misuse, according to <a href="https://www.theguardian.com/us-news/2016/aug/30/pentagon-officials-strip-clubs-casinos-misuse">The Guardian</a>.</p>
<p>Twenty-two of the audited cardholders received "overpayments" totaling $8,544 when they requested reimbursements for their expenses.</p>
<p>The charge cards are generally used for expenses from government business, particularly travel &mdash; a far cry from strip clubs and gambling.</p>
<p>Among the more salacious details in the report, a Navy employee who spent $1,417 on "adult entertainment" was "retrained" and signed a new "statement of understanding" indicating that the employee could only use his card for "PG-13" purposes. No&nbsp;further action was taken.</p>
<p>Another Navy employee, who racked up $1,078 in "adult" charges, was handed a "nonpunitive letter of caution," and is still able to use the government card.</p>
<p>The report says that the department "experienced potential national security vulnerabilities" as a&nbsp;result of the Defense Department's lack of oversight over the spending.&nbsp;</p>
<p>Among the inspector general's recommendations were to "improve the identification of personal use of the travel card," and "improve the actions taken to eliminate travel card misuse by cardholders" by reducing credit limits and closely monitoring cardholders who had misused the cards.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/pentagon-the-thaad-deployment-to-south-korea-is-only-the-first-step-if-north-korea-doesnt-behave-2016-8" >Pentagon: If North Korea doesn't behave, THAAD deployment to South Korea is only the first step</a></strong></p>
<p><a href="http://www.businessinsider.com/pentagon-allowed-almost-1-million-in-casino-charges-2016-8#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/why-nasa-has-not-sent-humans-to-mars-2018-2">The surprising reason why NASA hasn't sent humans to Mars yet</a></p> http://www.businessinsider.com/the-terrible-recovery-from-the-great-recession-is-due-to-budget-cuts-2016-8The terrible recovery from the Great Recession is due to Congress' economic incompetencehttp://www.businessinsider.com/the-terrible-recovery-from-the-great-recession-is-due-to-budget-cuts-2016-8
Thu, 04 Aug 2016 17:17:00 -0400Robert E. Scott
<p><a href="http://blogs.wsj.com/economics/2016/07/29/seven-years-later-recovery-remains-the-weakest-of-the-post-world-war-ii-era/"><img style="float:right;" src="http://static2.businessinsider.com/image/57a1e5c0ce38f239008b4613-2400/gettyimages-84211317.jpg" alt="congress joint session" data-mce-source="Chip Somodevilla/Getty Images" data-mce-caption="A joint session of Congress meets to count the Electoral College vote from the 2008 presidential election the House Chamber in the U.S. Capitol January 8, 2009 in Washington, DC." />In a story in the&nbsp;<em>Wall Street Journal&nbsp;</em>last Friday</a>, reporter Eric Morath notes that the recovery from the Great Recession has been historically slow. &ldquo;In terms of average annual growth,&rdquo; he writes, &ldquo;the pace of this expansion has been by far the weakest of any since 1949.&rdquo; Missing from this story is the fact that our historically weak recovery has been accompanied by historically deep cuts in government spending. The figure below compares the strength of expansion for each recovery since 1949 with changes in government spending (it includes data on the strength of each expansion, as reported by Morath). You can see that almost every other recovery was accompanied by an increase in federal, state, and local government spending.</p>
<p>During a recession, changes in government spending have a &ldquo;multiplier effect&rdquo; on output and income: each dollar of additional spending increases&mdash;and each dollar cut spending decreases&mdash;GDP by much more than one dollar. The Great Recession of 2008-2009 was the worst on record since the Great Depression of the 1930s, in terms of both total decline in real GDP, and total increase in the unemployment rate between the previous peak and the beginning of the subsequent recovery. The economy was in a very deep hole in 2009, and had we spent the way we did after previous recessions, we would have experienced substantial increase in GDP since then. Instead, cuts in government spending over the last eight years have had a pernicious, negative impact on output and income, as well as on jobs and wages, which depend on the level of spending in the economy. If it weren&rsquo;t for these cuts, the economy would likely be fully recovered by now, and the expansion would have equaled or exceeded the Bush recovery.</p>
<p><img src="http://static2.businessinsider.com/image/57a1e124ce38f298008b45f2-800/graph-1.gif" alt="graph 1" data-mce-source="Economic Policy Institute" /></p>
<p><span>Meanwhile, Figure B compares data on the total size of each expansion with changes in total government spending in each period. If government spending had increased by 11.7 percent, as it did during the Bush recovery of 2001-2007, the present expansion, which was constrained by a 6.1% decline in government spending, would easily have exceeded the size of the Bush expansion. If government spending had increased by 33.5 percent, as it did during the Reagan recovery (1982-1990), then the Obama recovery would surely rank as one of the strongest on record. We would be enjoying true full employment and rapid GDP growth, as we did in the late 1980s.</span></p>
<p><span><img src="http://static1.businessinsider.com/image/57a1e130ce38f235008b4603-800/graph-2.gif" alt="graph 2" data-mce-source="Economic Policy Institute" /></span></p>
<p>It is not too late for federal spending to strengthen the recovery. As <a href="http://cepr.net/blogs/beat-the-press/more-thoughts-on-patents-and-copyrights">Dean Baker notes</a>, economists know that the way to get out of a depression is by &ldquo;spending money.&rdquo; <a href="http://larrysummers.com/2014/10/07/why-public-investment-really-is-a-free-lunch/">Larry Summers has recently been a strong advocate for infrastructure</a> investments, in particular, arguing that they have a high social rate of return and are thus largely self-financing. But instead of boosting spending, as is typical in a recession, Congress has abandoned fiscal policy, largely refusing to fund even normal (inflation- and population-adjusted) increases in government spending, <a href="http://www.epi.org/blog/larry-summers-the-congressional-progressive-caucus-budget-and-the-abandonment-of-fiscal-policy/">as my colleague Josh Bivens has noted repeatedly</a>&nbsp;(Josh will be releasing a paper exploring&nbsp;this same topic in depth in the coming weeks). Many state governments also made damaging spending cuts, and state government employment today is still below 2009 levels.</p>
<p>Recent polls from <a href="http://www.gallup.com/poll/1669/general-mood-country.aspx">Gallup</a> and <a href="http://www.wsj.com/public/resources/documents/16495NBCWSJJuly2016Poll.pdf">NBC News/Wall Street Journal</a> indicate that between 75 and 82 percent of the public thinks that the nation is on the &ldquo;wrong track.&rdquo; It is critically important that the public understands why we&rsquo;re on that track. But for the cuts in federal spending imposed by the Republican-dominated Congress, the economy would be roaring now. Those responsible for this mess should be held responsible for their economic incompetence.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/cities-everywhere-are-setting-themselves-up-to-become-the-next-detroit-2016-8" >Cities everywhere are setting themselves up to become the next Detroit</a></strong></p>
<p><a href="http://www.businessinsider.com/the-terrible-recovery-from-the-great-recession-is-due-to-budget-cuts-2016-8#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/why-nasa-has-not-sent-humans-to-mars-2018-2">The surprising reason why NASA hasn't sent humans to Mars yet</a></p> http://www.businessinsider.com/prison-spending-education-spending-united-states-2016-7US spending on prisons and jails grew three times as fast as spending on education in the last 3 decadeshttp://www.businessinsider.com/prison-spending-education-spending-united-states-2016-7
Sun, 17 Jul 2016 19:53:00 -0400Caroline Simon
<p><img src="http://static2.businessinsider.com/image/578c26ce88e4a7d9068b8a2f-1024/4853491803_a05b514aee_b.jpg" alt="Empty classroom" data-mce-source="FLickr / KT King" data-link="https://www.flickr.com/photos/xtrah/4853491803/in/photolist-8oTq2a-8dpjSW-aLYETg-dM69jk-f6gJJ7-7vc88o-4j8Cvy-55W7zY-7f65oS-4EAfvT-aAQR7J-p4VbxT-9QuzD3-CKUJ5-a6hpoj-7zSqem-3KjAhq-9hbvmj-mYAx8F-cA8V2y-bYXd3w-2d7V2-8Q4wk2-7ydRUa-rsRnRG-HNKDD-pfCPgi-4xhqtG-fQqq3E-5mb7Bf-JbJ8g-8TVnmd-5WWtnX-aZM8ki-s542Y-3fgn9V-521zDp-p7Njk5-MEKhW-agFqe-sq8LAW-46kgBe-2etCe-4ayriu-9MFXs3-7v4ENF-nwuFBB-9chSab-5hiMD1-7Htkm9" /></p><p>A new federal <a href="http://www2.ed.gov/rschstat/eval/other/expenditures-corrections-education/brief.pdf">report</a> reveals that state and local governments have increased spending on prisons and jails&nbsp;at three times the rate they've increased spending on grade-school education in the last three decades.</p>
<p>The analysis used data from the Bureau of Justice Statistics, National Center for Education Statistics, US Census Bureau, and other sources to compare the changes in spending between 1979-1980 and 2012-2013.</p>
<p>Overall, spending on public elementary and secondary school education increased by 107%, while public spending on corrections increased by 324%.&nbsp;</p>
<p><img src="http://static5.businessinsider.com/image/578938d988e4a727008b882f-748/spending-increase-corrections-incarceration.png" alt="spending increase corrections incarceration" data-mce-source="US Department of Education" /></p>
<p>Among individual states, spending increases on corrections varied considerably.&nbsp;Massachusetts ramped up spending by 149%, and in Texas, spending rose by 850%.</p>
<p>For education, the numbers were also wide-ranging &mdash; from an 18% education spending increase in Michigan, to a 326% increase in Nevada.&nbsp;</p>
<p>The data also compared hikes in spending on corrections to increases in spending on public higher education. Between 1989-1990 and 2012-2013, corrections spending increased by 89%, while higher education spending remained almost completely flat.&nbsp;</p>
<p><img src="http://static2.businessinsider.com/image/5789394288e4a7d9068b876b-759/higher-education-corrections-spending-increase.png" alt="higher education corrections spending increase" data-mce-source="US Department of Education" /></p>
<p>The numbers paint a particularly grim picture of American spending priorities, according to US Secretary of Education John B. King Jr.&nbsp;</p>
<p><span>"Budgets reflect our values, and the trends revealed in this analysis are a reflection of our nation's priorities that should be revisited," King said in a <a href="http://www.ed.gov/news/press-releases/report-increases-spending-corrections-far-outpace-education">press release</a>. "For far too long, systems in this country have continued to perpetuate inequity. We must choose to make more investments in our children's future. We need to invest more in prevention than in punishment, to invest more in schools, not prisons."</span></p>
<p>Experts have long been concerned about the connection between poor commitment to education and increases in incarceration. According to the&nbsp;report,&nbsp;the US has 5% of the world's overall population but 20% of the world's prison population. Two-thirds of inmates in state prisons have not completed high school.</p>
<p>The disparity disproportionately affects people of color; black men between the ages of 20 and 24 are more likely to be incarcerated than employed, according to data cited in the study.</p>
<p>The report notes that incarceration rates have skyrocketed over the last few decades despite decreases in actual crime rates, partially because of mandatory minimum sentencing laws. But researchers <a href="http://abcnews.go.com/US/story?id=95580">question</a> whether incarceration is actually an effective method for reducing crime.</p>
<p>The report suggests redirecting some of the money for incarceration toward education instead &mdash; in part by raising teacher salaries and expanding access to preschool, higher education, and correctional education.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/student-spending-falls-for-the-first-time-in-nearly-40-years-2013-5" >Public Education Spending Per Student Falls For The First Time In Nearly 40 Years</a></strong></p>
<p><a href="http://www.businessinsider.com/prison-spending-education-spending-united-states-2016-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/undercover-prisoner-inmate-police-60-days-ae-tami-2016-3">A police officer who went undercover as a prisoner says the inmates shared this troubling trait</a></p> http://www.businessinsider.com/we-are-in-an-investing-twilight-zone-2016-7We are in an investing 'twilight zone'http://www.businessinsider.com/we-are-in-an-investing-twilight-zone-2016-7
Fri, 15 Jul 2016 13:13:45 -0400Seth Archer
<p><img style="float:right;" src="http://static3.businessinsider.com/image/578916e588e4a7da328b83ad-2400/rtr4b8uk.jpg" alt="weird chrome balls with feet odd strange" data-mce-source="REUTERS / Jason Reed" data-mce-caption="A local surfer walks past a sculpture which is part of the &amp;quotSculpture by the Sea&amp;quot exhibition at Sydney's Tamarama Beach on its opening day" /></p><p>It has been a crazy year for markets.</p>
<p>We've hit worrying lows &mdash; with <a href="http://www.businessinsider.com/closing-bell-february-11-2016-2">headlines like "Chaos on Wall Street"</a> &mdash; and then not long&nbsp;after <a href="http://www.businessinsider.com/all-time-high-is-mother-of-all-buy-signals-2016-7">catapulted over record highs.</a> It's almost like investors are trying to get their story straight, but can't quite agree on where the world is headed.</p>
<p>One analyst is calling this strange period an "investing twilight zone."</p>
<p>"2016 has thus far lived up to our expectations that this might be a watershed year that would redefine investment styles," Viktor Shvets, analyst at Macquarie, said in a note to clients.</p>
<p>"Investors are residing in a &lsquo;twilight&rsquo; zone between dying free market signals and the coming era of state-driven credit, capital investment and consumption."</p>
<p>There are two primary factors driving the 'twilight zone' mentality on Wall Street, according to Shvets: <em>Global leverage and a lack of productivity.&nbsp;</em></p>
<p><span style="line-height: 1.5em;">The global economy has too much debt, totaling as much as three times gross domestic product, according to Shvets.&nbsp;</span><span style="line-height: 1.5em;">This amount leads to volatility in the markets and undermines investor confidence.</span></p>
<p>At the same time, increasing advances in technology mean that computers are&nbsp;replacing basic human jobs instead of augment them, leading to lower productivity, according to Shvets.</p>
<p>"This will likely force central banks to maintain current monetary policies, as the only way to avoid demand contraction and ensure that asset values are rising to facilitate further leveraging," Shvets writes.</p>
<h2>The solution</h2>
<p>There is one way out of the twilight zone&nbsp;if you're to believe Shvets. He calls is the "nationalization of capital."</p>
<p>The best way to cement prices and demand is for states to take over capital allocation spending. Central banks would fund public consumption, infrastructure spending and research and development.</p>
<p>It's a risky plan. If not done correctly, nationalization of capital could lead to deflation, hyper-inflation, lower return on equity or even more capital misallocation.</p>
<p>&nbsp;A lot of <a href="http://www.businessinsider.com/big-finance-names-want-fiscal-stimulus-2016-5">big names in finance are in favor of government stimulus</a>, agreeing that it's necessary&nbsp;to get out of the funk the global economy is in right now.</p>
<p>As Mohammad El-Erian, chief economic advisor to Allianz&nbsp;put it, <a href="http://www.businessinsider.com/mohamed-el-erian-weve-reached-the-end-of-the-road-2016-3">we are at the end of the road</a>. There will either be an event that sets markets back on track, or no one figures it out in time and we face the&nbsp;next big market crash. But we are approaching the point where we figure out which path is the right one.</p>
<p>No matter what you call it, end of the road or twilight zone, investors need to get their story straight, and soon.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/mohamed-el-erian-weve-reached-the-end-of-the-road-2016-3" >EL-ERIAN: 'The road we're on is coming to an end'</a></strong></p>
<p><a href="http://www.businessinsider.com/we-are-in-an-investing-twilight-zone-2016-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/cut-cable-directv-now-streaming-cord-cutting-youtube-tv-hulu-sling-2018-3">I quit cable for DirecTV Now and it's saving me over $1,000 a year — here's how I did it</a></p> http://www.businessinsider.com/jpmorgan-governments-should-start-spending-2016-7JPMORGAN: It's time for the government to start spendinghttp://www.businessinsider.com/jpmorgan-governments-should-start-spending-2016-7
Tue, 05 Jul 2016 09:03:06 -0400Bob Bryan
<p><img style="float:right;" src="http://static3.businessinsider.com/image/577bad364321f1c62f8b54ed-2168/gettyimages-456986114.jpg" alt="miley cyrus money cash dollars pop star happy" data-mce-source="Scott Barbour/Getty Images" data-mce-caption="Miley Cyrus throws money in the air as she performs at the opening night of her Bangerz Tour in Australia at Rod Laver Arena on October 10, 2014 in Melbourne, Australia." /></p><p>We have seen some pretty incredible attempts at economic stimulus in the post-financial-crisis world, including <a href="http://www.businessinsider.com/negative-interest-rates-causing-safe-sales-spike-2016-6">negative interest rates</a> and <a href="http://www.businessinsider.com/european-central-bank-meeting-june-2016-6">monumental bond-buying programs</a> from central banks.</p>
<p>Despite this, the world continues to be <a href="http://www.businessinsider.com/world-economys-depressing-reality-in-one-chart-2016-6">stuck in a slow-growth rut</a>, and policymakers are still searching for a way out.</p>
<p>It may be time, then, to return to a tried-and-true method that has fallen out of favor during this recovery, according to Jan Loeys at JPMorgan: Governments should <a href="http://www.businessinsider.com/fiscal-stimulus-could-jumpstart-economy-2016-2">start spending more</a>.</p>
<p>"Growth remains at snail's pace," Loeys wrote in JPMorgan's "House View" series. "It is not making voters happy; they are clamoring for better. Monetary policy has done a heroic job keeping the world economy afloat, but it does not have much left to give. It is probably time to pass on the baton to fiscal policy, as governments can borrow at historic low costs."</p>
<p>The big key here, according to Loeys, is that interest rates are so low that <a href="http://www.businessinsider.com/us-government-19-trillion-debt-not-a-problem-2016-4">the decrease in borrowing costs</a> for the government would offset some of the negatives of fiscal stimulus.</p>
<p>In addition, government can <a href="http://www.businessinsider.com/fiscal-stimulus-stocks-outperforming-the-market-2016-5">take a longer view</a> on investments that many private companies don't have the stomach for given the slow growth economy.</p>
<p>"Economists generally accept the argument there is failure in the market for long-horizon projects (say 25-100 years out) that are easier for governments to finance as they 'live' much longer than the average private company," Loeys wrote.</p>
<p>"Finally, companies are not investing much as they see weak demand. Fiscal spending can get the ball rolling, forcing the private sector to follow (the Keynesian accelerator force)."</p>
<p>While there is always concern for waste in government projects, Loeys said, the upside may be worth the possibility of some misallocation.</p>
<p>Much of the resistance to fiscal stimulus has been political. Especially in the US, <a href="http://www.businessinsider.com/us-government-19-trillion-debt-not-a-problem-2016-4">concerns over debt</a> have led to a significant decrease in government investment since the original fiscal spending during the recession. In Europe, austerity has dominated recovery conversations as opposed to taking on debt.</p>
<p>The idea of increasing fiscal easing, however, has begun to gain traction in recent months. In addition to big names in <a href="http://www.businessinsider.com/big-finance-names-want-fiscal-stimulus-2016-5">the finance world</a> &mdash; JPMorgan CEO Jamie Dimon, hedge fund investor Carl Icahn, and BlackRock CEO Larry Fink, to name a few &mdash; both <a href="http://www.businessinsider.com/donald-trump-and-hillary-clinton-agree-on-one-huge-thing-and-wall-street-knows-it-2016-5">US presidential frontrunners have advocated</a> such policies.</p>
<p>The mix of private pressure and increasing political will, Loeys said, makes the policy a bit more likely than in past years.</p>
<p>"<span>With voters clamoring for better incomes and a view that fiscal easing would be a lot more effective to boost growth than populist alternatives such as protectionism, this analysts raises the odds of significant fiscal stimulus over the next 18 months from very low to not so low anymore," he concluded.</span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/us-government-19-trillion-debt-not-a-problem-2016-4" >The US government's $19 trillion debt isn't a problem</a></strong></p>
<p><a href="http://www.businessinsider.com/jpmorgan-governments-should-start-spending-2016-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/rise-and-fall-of-hooters-airline-myrtle-beach-bob-brooks-atlanta-airplanes-2018-2">The rise and fall of Hooters Air — the airline that lost the 'breastaurant' $40 million</a></p> http://www.businessinsider.com/brexit-fallout-george-osborne-abandons-pledge-to-balance-government-budget-2016-7George Osborne just abandoned his most important economic policy because of Brexithttp://www.businessinsider.com/brexit-fallout-george-osborne-abandons-pledge-to-balance-government-budget-2016-7
Fri, 01 Jul 2016 07:54:12 -0400Oscar Williams-Grut and Oscar Williams-Grut
<p><img style="float:right;" src="http://static5.businessinsider.com/image/577661e6dd089578548b4ce1-1529/pa-26735200.jpg" alt="Chancellor George Osborne speaks at The Times CEO summit in London." data-mce-source="Neil Hall / PA Wire/Press Association Images" data-mce-caption="Chancellor George Osborne." data-link="https://www.paimages.co.uk/image-details/2.26735200"></p><p>The Chancellor has abandoned plans to balance the government's budget by the end of the decade, blaming uncertainty surrounding Britain's exit from the European Union.</p>
<p>A commitment to reach a budget surplus — collecting more in taxes than it spends on public services — has been central to Osborne's vision as Chancellor since taking the office in 2010. The government had pledged to reach a surplus by 2020, a key commitment for this parliament.</p>
<p>But George Osborne said in a speech in Manchester on Friday that the government had to be "realistic" about the nation's finances following last week's surprise decision by the public to leave the EU.</p>
<p>Here's part of Osborne's speech, <a href="https://next.ft.com/content/2cb9eef6-ee83-3a05-b1e8-a41c2be5ae8e">as per the Financial Times</a>:</p>
<p style="padding-left: 30px;">“The government must provide fiscal credibility so we will continue to be tough on the deficit but we must be realistic about achieving a surplus by the end of this decade.”</p>
<p style="padding-left: 30px;">“We need to reduce uncertainty by moving as quickly as possible to a new relationship with Europe and being super competitive, open for business and free trading. That’s the plan and we must set to it.”</p>
<p>The pound <a href="http://uk.businessinsider.com/the-pound-is-dropping-again-2016-6">fell to a 31-year low against the dollar in the wake of the Brexit result</a> and the <a href="http://uk.businessinsider.com/sp-downgrades-uk-credit-rating-to-aa-from-aaa-2016-6">UK's credit rating has been downgraded</a>, both of which make it more costly for the country to borrow.</p>
<p>Most banks and forecasting agencies also <a href="http://uk.businessinsider.com/eu-referendum-brexit-impact-pantheon-macroeconomics-chart-on-recession-probability-2016-7">now expect the UK to enter a recession in the coming years</a> as uncertainty around exit negotiations depresses investment in the country.</p>
<p>The abandoning of the target comes a day after figures showed Britain's current account deficit is still near record highs. The deficit between taxes collected and amount spent for the first quarter <a href="http://www.thetimes.co.uk/edition/business/horribly-high-32-6bn-deficit-increases-fears-of-sterling-crisis-pcb205brd">stood at £32. 6 billion, according to the Office of National Statistics.</a></p>
<p>The Conservative party has repeatedly attacked Labour for "failing to fix the roof while the sun was shining" and have tried to tackle the government's spending deficit. That has led to over half a decade of austerity, as Osborne slashed spending to bring down costs.</p>
<p>The Chancellor has fired off a series of tweets following his speech, emphasising that the change of economic course was always allowed for under plans as Brexit counts as a "significant negative shock to the UK."</p>
<p><div>
<blockquote class="twitter-tweet" data-lang="en" data-cards="" data-conversation="">
<p lang="en" dir="ltr">
We must provide fiscal credibility by continuing to be tough on deficit while being realistic about achieving surplus by end of the decade. </p>— George Osborne (@George_Osborne) <a href="https://twitter.com/mims/statuses/748843442571243520">July 1, 2016</a>
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<p> <div>
<blockquote class="twitter-tweet" data-lang="en" data-cards="" data-conversation="">
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Our fiscal rules explicitly provide flexibility in face of what Charter calls 'significant negative shock to UK' </p>— George Osborne (@George_Osborne) <a href="https://twitter.com/mims/statuses/748843656279429120">July 1, 2016</a>
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<p> <div>
<blockquote class="twitter-tweet" data-lang="en" data-cards="" data-conversation="">
<p lang="en" dir="ltr">
We can best address business uncertainty by moving quickly to define new relationship we want with EU </p>— George Osborne (@George_Osborne) <a href="https://twitter.com/mims/statuses/748843934076510209">July 1, 2016</a>
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<p> <div>
<blockquote class="twitter-tweet" data-lang="en" data-cards="" data-conversation="">
<p lang="en" dir="ltr">
In my view key objective for the economy is best possible terms of trade with EU in goods and services including financial services </p>— George Osborne (@George_Osborne) <a href="https://twitter.com/mims/statuses/748844548818960384">July 1, 2016</a>
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<p> <div>
<blockquote class="twitter-tweet" data-lang="en" data-cards="" data-conversation="">
<p lang="en" dir="ltr">
And we must make UK even more competitive, free trading &amp; open to business. This is the economic plan for months ahead &amp; we must set to it </p>— George Osborne (@George_Osborne) <a href="https://twitter.com/mims/statuses/748844931826016264">July 1, 2016</a>
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</div></p><p><a href="http://www.businessinsider.com/brexit-fallout-george-osborne-abandons-pledge-to-balance-government-budget-2016-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/goldman-sachs-outlook-for-bitcoin-and-ethereum-2018-2"> Goldman Sachs investment chief: Bitcoin is definitely a bubble, Ethereum even more so </a></p> http://www.businessinsider.com/floppy-disks-control-us-nuclear-weapons-2016-5US nuclear forces are controlled by this shockingly obsolete techhttp://www.businessinsider.com/floppy-disks-control-us-nuclear-weapons-2016-5
Thu, 26 May 2016 19:42:00 -0400Dave Mosher
<p><img style="float:right;" src="http://static1.businessinsider.com/image/5746e5e4dd089515598b4649-800-578/ibm-series-1-computer.jpg" alt="ibm series 1 computer" data-mce-source="IBM" data-link="https://www-03.ibm.com/ibm/history/exhibits/vintage/vintage_4506VV4024.html" /></p><p>A new government report paints a disquieting picture of the computer systems used to run the United States.</p>
<p>The 87-page report, which the Government Accountability Office (GAO) gave the scolding title of "<a href="http://www.gao.gov/assets/680/677436.pdf">Federal Agencies Need to Address Aging Legacy Systems</a>," was drummed up for members of Congress who wanted to know how $80 billion worth of taxpayer dollars was being spent annually on information technology.</p>
<p><span style="line-height: 1.5em;">Writers of the report took a hard look at information technology used by crucial government agencies, including the Department of Justice, the Department of Treasury, the Social Security Administration, and the Department of Veteran Affairs.</span></p>
<p>They found most of the money is spent on maintaining existing systems, including many &nbsp;that are more than 30 years old and which agencies have no current plans to modernize or replace.</p>
<p>But perhaps the most alarming information touches on the Department of Defense (DoD), which controls the nation's stockpile of <a href="https://www.armscontrol.org/factsheets/Nuclearweaponswhohaswhat">7,100 nuclear and thermonuclear warheads</a>.</p>
<p>The GAO found that the <a href="http://fas.org/nuke/guide/usa/c3i/saccs.htm">Strategic Automated Command and Control System</a> (SACCS) &mdash; a computer system that "coordinates the operational functions of the United States' nuclear forces, such as intercontinental ballistic missiles, nuclear bombers, and tanker support aircrafts" &mdash; <strong>still runs on 8-inch floppy disks</strong>.</p>
<p>Like this one:</p>
<p><img class="full" src="http://static2.businessinsider.com/image/5746e5e4dd089515598b464a-864-565/ibm-8-inch-floppy-disk.jpg" alt="ibm 8 inch floppy disk" data-mce-source="IBM" data-link="http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/floppy/" /></p>
<p>Specifically, the DoD would pop one or more of these disks into an IBM Series/1 Computer, a commercial version of which is shown at the top of this post, to help initiate a nuclear strike.</p>
<p>And here is an admittedly pixelated photo from the report of the actual IBM computers that make up &nbsp;SACCS:</p>
<p><img class="full" src="http://static1.businessinsider.com/image/5746e78bdd0895e70b8b474b-1024-586/saccs-ibm-series-1-computers-dod-gao-strategic-automated-command-control-system.png" alt="saccs ibm series 1 computers dod gao strategic automated command control system" data-mce-source="GAO" data-link="http://www.gao.gov/assets/680/677436.pdf" /></p>
<p>What does this ancient system do?&nbsp;<span style="line-height: 1.5em;">Per the GAO report:</span></p>
<blockquote>
<p>[T]he system's primary function is to send and receive emergency action messages to nuclear forces. According to Defense officials, the system is made up of technologies and equipment that are at the end of their useful lives. For example, the system is still running on an IBM Series/1 Computer, which is a 1970s computing system, and written in assembly language code. It also uses 8-inch floppy disks, which are a 1970s-era storage device; and assembly programming code typically used in mainframes. Replacement parts for the system are difficult to find because they are now obsolete.</p>
</blockquote>
<p>If you're worried about 53-year-old technology standing partly between commanders and the end of the world or, depending on whom you ask, the defense of the country, you'll be happy to know that <a href="http://www.armed-services.senate.gov/imo/media/doc/Wilson_03-05-14.pdf">the military is, too</a>. It plans to update these computers by 2017 and replace them with modern systems by 2020.</p>
<p>But US command and control systems aren't the only pieces of nuclear strike infrastructure that are dated: The nuclear weapons themselves are not getting any younger.</p>
<p>To confront that problem, a <a href="http://www.techinsider.io/nuclear-weapons-life-extension-us-russia-2015-11">$1 trillion dollars is underway</a> (yes, $1,000,000,000,000) to update many weapons and take others out of service over the next 30 years.</p>
<p>However, there is <a href="http://www.techinsider.io/tribeca-bomb-documentary-movie-2016-4">intense debate</a> about whether or not this tremendously expensive nuclear modernization program is slipping new, fearsome abilities into aging weapons and <a href="http://www.techinsider.io/nuclear-weapons-life-extension-us-russia-2015-11">triggering a new arms race with Russia</a>, among other concerns.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-to-watch-the-next-spacex-launch-2016-5" >SpaceX just postponed tonight's extremely difficult landing attempt</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/watch-nasa-expand-its-inflatable-habitat-2016-5" >NASA is about to expand its giant inflatable habitat on the International Space Station — here’s how to watch live</a></strong></p>
<p><a href="http://www.businessinsider.com/floppy-disks-control-us-nuclear-weapons-2016-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/animated-map-every-nuclear-bomb-explosion-ever-history-2016-3">Animated map shows every nuclear-bomb explosion in history</a></p> http://www.businessinsider.com/zika-virus-potential-threat-united-states-prevention-government-spending-2016-4CDC on Zika virus: It's 'scarier than we initially thought'http://www.businessinsider.com/zika-virus-potential-threat-united-states-prevention-government-spending-2016-4
Tue, 12 Apr 2016 10:09:00 -0400Emma Fierberg
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<p class="p1">Dr. Anne Schuchat of the CDC spoke at the White House on Monday April 11, 2016 about the potential threat Zika virus may have on the United States. </p>
<p><em>Produced by <a href="http://www.businessinsider.com/author/emma-fierberg" target="_blank">Emma Fierberg</a></em></p>
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<p class="p1"><span class="s1"> </span></p><p><a href="http://www.businessinsider.com/zika-virus-potential-threat-united-states-prevention-government-spending-2016-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/democrats-are-demanding-an-investigation-into-3-billion-of-wasted-drugs-2016-3Democrats are demanding an investigation into $3 billion of wasted drugshttp://www.businessinsider.com/democrats-are-demanding-an-investigation-into-3-billion-of-wasted-drugs-2016-3
Sat, 12 Mar 2016 02:01:00 -0500Eric Pianin
<p><img style="float:right;" src="http://static5.businessinsider.com/image/56e3ab4852bcd05b008b5fc1-3045-2284/rtr3cgfy.jpg" alt="prescription drugs" data-mce-source="REUTERS/Brian Snyder" data-mce-caption="Pharmacist Jim Pearce fills a Suboxone prescription at Boston Healthcare for the Homeless Program in Boston, Massachusetts January 14, 2013." /></p><p>Efforts to combat pricey drug costs that are blowing a hole in the pockets of consumers and the budgets of government agencies picked up a little steam on Thursday.</p>
<p>Eleven Democratic senators &ndash; including presidential candidate Bernie Sanders -- pressed the Food and Drug Administration and the Department of Health and Human Services to investigate the impact of pharmaceutical companies selling &ldquo;one size fits all&rdquo; vials of drugs to treat cancer and other deadly diseases.</p>
<p>To some, the size of the container of breakthrough biometric drugs may seem like a minor consideration. Yet a&nbsp;<a href="http://www.bmj.com/content/352/bmj.i788">new study</a>&nbsp;published last week in the medical journal BMJ by a research team at New York&rsquo;s Sloan Kettering Cancer Center found that nearly $3 billion a year is wasted by purchasing injectable cancer medicine in vials or containers that provide more medicine than is needed by a patient.</p>
<p>The remainder of the drug is usually thrown away, rather than used on another patient.</p>
<p>Costly drugs such as Velcade, used to treat multiple myeloma, are typically injected by a nurse working in a doctor&rsquo;s office or hospital and are only available in vials larger than the average dose. Unlike industry practices in Europe, where drugs are often sold in packages of varying sizes to meet specific needs, U.S. drug manufacturers generally follow a one-size-fits all approach that leads to extraordinary waste. As much as a third of the medicine in a vial is often discarded by nurses or doctors, or in rare instances used in the treatment of other patients.</p>
<p>&ldquo;Even though reducing waste in healthcare is a top priority, analysts have missed the waste that can be created when expensive infused drugs are packaged containing quantities larger than the amount needed,&rdquo; Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Sloan Kettering, said in the report. This is particularly true for drugs for which dosage is based on a patient&rsquo;s weight or body size and that come in single dose packages.&rdquo;</p>
<p>Bach and his colleagues analyzed the waste resulting from the use of the 20 top selling cancer medicines. They concluded that health care insurers paid $1.8 billion annually for discarded quantities of medicine and another $1 billion of added &ldquo;markups&rdquo; by doctors and hospitals &ndash; for a total cost of $2.8 billion.</p>
<p>Since Medicare and many private health insurance companies charge patients co-payments equal to as much as 20 percent for prescription drugs, the senators noted in their letter, &ldquo;Patients are paying more in out-of-pocket costs for drugs that end up in the trash bin,&rdquo; the senators said in their letter.</p>
<p>&ldquo;What makes this situation even more alarming is the fact that patients, and the federal government, are already struggling with exorbitantly high prices for prescription drugs,&rdquo; the letter stated. &ldquo;Over the past few years, there have been a number of highly publicized incidents in which prices for certain drugs inexplicably skyrocketed resulting in significantly higher costs for families, insurers, and the federal government, as well as limiting access for those in need.&rdquo;&nbsp;</p><p><a href="http://www.businessinsider.com/democrats-are-demanding-an-investigation-into-3-billion-of-wasted-drugs-2016-3#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/what-would-happen-if-humans-tried-landing-on-jupiter-space-2018-2">What would happen if humans tried to land on Jupiter</a></p> http://www.businessinsider.com/4-reasons-ireland-is-the-fastest-growing-economy-in-the-eu-2016-3Here are 4 reasons why the Irish economy killed it in 2015http://www.businessinsider.com/4-reasons-ireland-is-the-fastest-growing-economy-in-the-eu-2016-3
Fri, 11 Mar 2016 06:39:32 -0500Matthew Nitch Smith
<p><img style="float:right;" src="http://static4.businessinsider.com/image/56e2aea3dd089557478b4734-2358-1769/ireland.jpg" alt="Ireland high five" data-mce-source="Reuters" data-link="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C0FCIXT9X3SO&amp;SMLS=1&amp;RW=1359&amp;RH=684#/SearchResult&amp;VBID=2C0FCIXT9X3SO&amp;SMLS=1&amp;RW=1359&amp;RH=684&amp;POPUPPN=9&amp;POPUPIID=2C0408TFYICUM" /></p><p>If the global economy is going through a rough time at the moment, nobody told Ireland.</p>
<p>The Central Statistics Office (CSO) has just announced the counrty's GDP expanded 7.8% in 2015. <a href="http://www.cso.ie/indicators/Maintable.aspx">Even better, in the last quarter it grew a massive 9.2%</a>.</p>
<p>That's the fastest growth rate in the whole of the EU &ndash; by far. It's even more impressive given Ireland needed a &euro;67 billion (&pound;52 billion; $74.3 billion) bailout just two years ago.</p>
<p>So what gives? How did Ireland grow so fast last year when the UK only managed 2.2% &ndash; a number that was still better than most other developed nations.</p>
<p>There are four simple but important reasons:</p>
<ul>
<li><strong>A huge jump in exports &ndash;</strong> Irish exports <a href="http://www.rte.ie/news/business/2016/0215/768125-cso-trade/">increased by almost 20% in last year to over &euro;111 billion (&pound;86.27; $123) in 2015</a>. Pharmaceuticals, chemicals, medical equipment and cosmetics were the most popular products leaving Ireland's shores.</li>
<li><strong>Irish people are buying even more things &ndash; </strong>Consumer spending in the country was in rude health in 2015, <a href="http://www.tradingeconomics.com/ireland/consumer-spending">at &euro;22,6 billion (&pound;17.5 billion; $25.1 billion) a 3.5% jump from the year before</a>. Over &euro;2.4 billion (&pound;1.9 billion; $2.7 billion) of that was ordered online and delivered directly to Irish homes.</li>
<li><strong>The Irish government is spending less &ndash; </strong>Ireland's 2015 government expenditure <a href="http://www.bloomberg.com/news/articles/2016-03-10/irish-economy-expanded-7-8-in-2015-fastest-pace-since-2000">dropped by almost 7% compared to 2014</a>, with the vast majority going on welfare, health and education.</li>
<li><strong>People really like investing in Ireland &ndash; </strong>compared to last year, capital investments jumped a massive 28% compared to 2014. A late 2015 venture capital report by Inter Trade Ireland said that <a href="http://www.ivca.ie/wp-content/uploads/2015/10/Venture-Capital-2015-Guide.pdf">the number of venture capital funds operating in Ireland had more than doubled</a>, while the average size of funds had jumped from &euro;20 million (&pound;15.5 million; $22.2 million) to &euro;100 million (&pound;77.6 million; $111 million).</li>
</ul>
<p>China's recent slowdown has made a lot of people paranoid, and some analysts are worried about an Irish economic bubble. But the Financial Times notes that the nature of the growth is much more stable than the Irish construction boom of the late 90s <a href="http://www.ft.com/intl/cms/s/0/9090360e-9d2a-11e5-b45d-4812f209f861.html#axzz42P9EEiw2">because it's based on strong exports and foreign investment</a>.</p>
<p>The growth also marks another EU success story that pro Brexit commentators &ndash; people who want the UK to leave the EU &ndash; would probably rather ignore.</p><p><a href="http://www.businessinsider.com/4-reasons-ireland-is-the-fastest-growing-economy-in-the-eu-2016-3#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/jim-chanos-is-worried-about-the-economy-but-not-because-of-inflation-2018-2">Jim Chanos is worried about the economy, but not because of inflation</a></p> http://www.businessinsider.com/american-science-funding-statistics-vs-world-2016-2These 9 countries spend a greater share of money on science than the United Stateshttp://www.businessinsider.com/american-science-funding-statistics-vs-world-2016-2
Tue, 01 Mar 2016 08:44:00 -0500Rebecca Harrington
<p><img style="float:right;" src="http://static6.businessinsider.com/image/56d59ce9dd089590188b4728-1600-1067/nasa last shuttle atlantis .png" alt="nasa last shuttle atlantis " data-mce-source="Kim Shiflett/NASA" data-mce-caption="Atlantis' final return from space at 5:57 a.m. EDT, July 21, 2011 concluded the STS-135 mission, secured the space shuttle fleet's place in history and brought a close to America's Space Shuttle Program." data-link="http://www.nasa.gov/mission_pages/shuttle/shuttlemissions/sts135/multimedia/gallery/opf2.html" /></p><p>We've heard the trope that the United States is <a href="http://www.techinsider.io/americans-lag-behind-in-science-2015-12">falling behind in science</a>. But what evidence do we have for this &mdash; what do the numbers say?</p>
<p>Well, the data don't look&nbsp;good for America.</p>
<p>US kids do <a href="http://www.businessinsider.com/the-10-smartest-countries-based-on-math-and-science-2015-5" target="_blank">worse on math and science tests</a> than other countries. American universities also&nbsp;<a href="http://www.techinsider.io/most-technological-countries-lag-behind-in-science-2015-12">graduate a smaller portion of science majors</a>.</p>
<p>And, while the US still spends the most money on research and development, nine other countries outspend the nation&nbsp;when you look at that cash as a percentage of gross domestic product (GDP) &mdash; an important benchmark&nbsp;of a nation's total <a href="http://www.investopedia.com/ask/answers/199.asp" target="_blank">economic value</a>.</p>
<p>The US spent <a href="http://www.oecd-ilibrary.org/docserver/download/9215031ec006.pdf?expires=1456761220&amp;id=id&amp;accname=guest&amp;checksum=A20D1F4330E9EA99C106513C7C51ED29" target="_blank">$433 billion on R&amp;D in 2013</a> (the most recent data analyzed), according to the Organization for Economic Cooperation and Development's <a href="http://www.oecd-ilibrary.org/docserver/download/9215031e.pdf?expires=1449858591&amp;id=id&amp;accname=guest&amp;checksum=3E2C81A2DBCAAE82325DE65B71404981" target="_blank">2015 Science, Technology and Industry Scoreboard report</a>.</p>
<p>But this made up only&nbsp;<a href="http://www.keepeek.com/Digital-Asset-Management/oecd/science-and-technology/oecd-science-technology-and-industry-scoreboard-2015/r-amp-d-in-oecd-and-key-partner-countries-2013_sti_scoreboard-2015-graph53-en#page1" target="_blank">2.7% of America's GDP</a> that year.</p>
<p>This R&amp;D total includes money spent on science from government, non-profit, and business sources. American companies&nbsp;far outspend the government on research &mdash; making up about 70% of the total, according to the <a href="http://www.nsf.gov/statistics/2015/nsf15330/">National Science Foundation</a>.</p>
<p>Here are the nine countries that are spending&nbsp;a greater share on science than the US.</p><h3>9. Germany: 2.9% of its GDP</h3>
<img src="http://static6.businessinsider.com/image/56d59ce9dd089590188b472b-400-300/9-germany-29-of-its-gdp.jpg" alt="" />
<br/><br/><h3>8. Austria: 3% of its GDP</h3>
<img src="http://static5.businessinsider.com/image/56d59ce9dd089590188b472c-400-300/8-austria-3-of-its-gdp.jpg" alt="" />
<br/><br/><h3>7. Switzerland: 3% of its GDP</h3>
<img src="http://static1.businessinsider.com/image/55a69a792acae717448b461d-400-300/7-switzerland-3-of-its-gdp.jpg" alt="" />
<br/><br/><a href="http://www.businessinsider.com/american-science-funding-statistics-vs-world-2016-2#/#6-denmark-31-of-its-gdp-4">See the rest of the story at Business Insider</a> http://www.businessinsider.com/some-mexican-anti-corruption-spend-lavishly-on-trips-2016-2Caviar and champagne: Mexico's main anti-corruption agency has little idea how its own employees spend public money abroadhttp://www.businessinsider.com/some-mexican-anti-corruption-spend-lavishly-on-trips-2016-2
Fri, 19 Feb 2016 12:15:08 -0500Elinor Comlay
<p><img style="float:right;" src="http://static3.businessinsider.com/image/56c7487d6e97c623008b850b-711-533/2016-02-19t163458z_1_lynxnpec1i10p_rtroptp_3_britain.jpg" alt="harrod's department store" data-mce-source="Andrew Winning/Reuters" data-mce-caption="A bus passes in front of Harrods department store in Knightsbridge, central London April 2, 2012." /></p><p>A dinner of champagne,<span class="highlight"> caviar </span>and smoked salmon at up-market department store Harrods was how Hilda Garcia, a Mexican anti-corruption official, spent part of her $450 per day travel allowance in London last year.</p>
<p>A colleague, Jorge Pulido, sent to Kuala Lumpur for a conference, managed to spend more on taxis and meals out during a layover in Frankfurt than he did on his six-day hotel stay in Malaysia.</p>
<p>Jaime Cerdio was more austere. On a trip to Washington, he lived off $10 sandwiches and soda bought at the local Safeway and paid back almost a third of his total per diem allowance, replenishing the government's coffers with more than $1,000.</p>
<p>Mexico's Public Administration Ministry (SFP), charged with oversight and accountability in government, is responsible for reining in spending and tackling corruption. But it admits it has little idea how its own employees spend public money abroad, an examination by Reuters shows.</p>
<p>The SFP has only paper records of its employees' travel and government rules only require boarding passes and hotel receipts as verification. This means a large chunk of employees' per diem spending goes unchecked.</p>
<p>The ministry's finance department could not answer Reuters' questions on how many employees traveled last year, for how long and how much they spent. Instead, it handed over about 1,000 pages of paper files in cardboard boxes to review.</p>
<p>"We are reviewing this to make sure best practices are applied to this kind of spending," SFP head Virgilio Andrade told Reuters when asked whether officials should provide more details of how they spend government money abroad.</p>
<p><img style="float:right;" src="http://static6.businessinsider.com/image/5668af3772f2c152028b47a3-2048-1365/12265788_10153257441317919_1502254306921084491_o.jpg" alt="petrossian caviar" data-mce-source="Facebook.com/PetrossianWestHollywood" data-link="https://www.facebook.com/PetrossianWestHollywood/photos_stream" /></p>
<p>A new transparency law, approved last year, will mean government agencies and entities have to electronically publish their travel spending, Andrade said.</p>
<p>He hopes that will improve accountability since Mexicans will be able to see where government officials are traveling on official business and question travel spending.</p>
<p>For now, though, the government, tarred by conflict of interest scandals over home purchases by President Enrique Pena Nieto, his wife and his finance minister, has yet to introduce proposed rules to enact the transparency law and there is no date for when entities will have to make additional information - such as travel spending - public.</p>
<p>That has allowed Mexican government employees - even those at the SFP - to live large on foreign trips.</p>
<p>One SFP official, Alejandro Bonilla, in Hawaii for Trans-Pacific Partnership negotiations, enjoyed the calamari at his hotel in Kona so much he ate three rounds in 24 hours. He said his job managing the government's contracting policy unit means that he has to attend events such the TPP talks, which included two meetings in Hawaii and one in Guam last year.</p>
<h2>Expensive</h2>
<p><img src="http://static1.businessinsider.com/image/5156b00aecad04d97700001f-3264-2448/img_0984.jpg" alt="Harrods raspberry truffles" data-mce-source="Henry Blodget / Business Insider" data-link="http://www.businessinsider.com/" /></p>
<p>Pulido, the SFP's head of legal affairs, who spent more than $500 on two taxis and two meals in Frankfurt en route to an anti-corruption conference in Kuala Lumpur, said meals and taxis in Frankfurt are expensive and that he still did not spend more than his $450 per diem over the two days he was traveling.</p>
<p>In the United States, government officials are entitled to per diem allowances in limited circumstances and must provide receipts for reimbursements.</p>
<p>The $450 per day allowances for Mexican government workers abroad is more than the U.S. government pays in many U.S. cities but it is below the U.S. rate for some expensive foreign cities, such as London and Paris.</p>
<p>Per diem payments can lead to 'double dipping', for instance, if government officials also accept gifts of meals or travel, said Alexandra Wrage, founder of anti-bribery organization TRACE International in Annapolis, Maryland.</p>
<p>"Then the extra is cash in hand for the government official, which is pretty close to a bribe," she said.</p>
<p><img style="float:right;" src="http://static3.businessinsider.com/image/5156aea36bb3f7a86f00001a-3264-2448/img_0960.jpg" alt="Harrods jams" data-mce-source="Henry Blodget / Business Insider" data-link="http://www.businessinsider.com/" />Reuters found no evidence that any of the SFP officials accepted gifts of meals, travel or accommodation while also receiving a full per diem payment.</p>
<p>Andrade defended the per diem, saying that giving employees government funds upfront reinforces the idea that the trip is for official business.</p>
<p>Cerdio, the sandwiches-and-soda employee - who heads the transparency and accountability department - was the only one of 11 public servants who took trips between January and August last year to provide receipts and itemize all of the money that he spent from his $450-a-day-allowance.</p>
<p>Cerdio did not respond to requests for comment.</p>
<p>Garcia, the official who dined at Harrods, handed in most of her receipts.</p>
<p>One of her other meals was at Starbucks, she noted, and she viewed the meal at Harrods as a reward after a tough day working on an extradition process that involved multiple meetings in English discussing unfamiliar British law.</p>
<p>"We don't have the luxury and privilege to eat in Harrods every day."</p>
<p><em>(Reporting by Elinor Comlay; Editing by Simon Gardner and Kieran Murray)</em></p><p><a href="http://www.businessinsider.com/some-mexican-anti-corruption-spend-lavishly-on-trips-2016-2#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/how-jay-z-and-diddy-made-millions-off-of-cheap-alcohol-zack-omalley-greenburg-2018-3">How Jay-Z and Diddy used their fame to make millions off of 'cheap grapes'</a></p> http://www.businessinsider.com/want-bigger-government-vote-republican-2016-2Vote Republican if you want a bigger governmenthttp://www.businessinsider.com/want-bigger-government-vote-republican-2016-2
Wed, 10 Feb 2016 17:24:00 -0500Ryan McMaken
<p><img style="float:right;" src="http://static3.businessinsider.com/image/563bdd9b9dd7cc18008c7c4f-4021-3016/ap_161218497300.jpg" alt="republican debate" data-mce-source="AP Photo/Mark J. Terrill" /></p><p>One of the nice things about Bernie Sanders is that he seems to be honestly saying flat-out that he plans to massively increase the size of government.<br /><br />The other candidates are probably lying either to themselves or to us &nbsp;&mdash; or to both &mdash; about what they likely will do in office.<br /><br />Of course, it's been so long since any president oversaw a federal government that actually cut spending, we'd have to go back to the immediate post-war years to remember any of that.<br /><br />But, for decades, we've been told that a vote for the GOP &nbsp;is a vote for "smaller government." This is repeated both by Republicans, who say it like it's a good thing, and by Democrats who<em> still</em> seem to think that the GOP is committed to cutting grandma's safety net.<br /><br />If we look at federal spending, though, it's easy to see that the myth of the budget-cutting Republican president is just that: a myth.<br /><br />First, let's look at federal outlays overall. To make our analysis more simple, I have adjusted this for inflation, using the CPI, for lack of anything better. All dollar amounts here are in millions&nbsp;of 2015 dollars:</p>
<p><img src="http://static4.businessinsider.com/image/56bb3b272e526551008b631c-1370-825/screen shot 2016-02-10 at 8.28.07 am.png" alt="Screen Shot 2016 02 10 at 8.28.07 AM" data-mce-source="Mises Institute" /></p>
<div class="separator"><a href="https://3.bp.blogspot.com/-wI1BfP2BXQQ/Vro05d0_2yI/AAAAAAAAJhg/HPKysvbveO0/s1600/outlays1.jpg" target="_blank" class="hoverZoomLink"></a></div>
<p>Just from eyeballing the graph, we can see a few things. Spending during the the 1980s and 2000s was more robust than it was during the 1990s. And, we can see that after an initial huge jump in 2009, federal spending has been somewhat flat &mdash; albeit at a huge level of spending.<br /><br />We also find that &mdash; given the timing of fiscal years and the politics of the budget process &mdash; the huge increase in 2009 was initially engineered <em>not</em> by the Obama administration, but by the Bush administration.<br /><br />If we break out spending by each presidential administration, we can see how much spending increased during each one's tenure:</p>
<p><img src="http://static2.businessinsider.com/image/56bb3b4b2e5265bb008b6318-1168-812/screen shot 2016-02-10 at 8.29.27 am.png" alt="Screen Shot 2016 02 10 at 8.29.27 AM" data-mce-source="Mises Institute" /></p>
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<p>Because of the way that federal fiscal years work, we begin counting spending for a president in the fiscal year that <em>begins</em> <em>after</em> he's sworn in. For example, the periods we count for George H. W. Bush, are the fiscal years of 1990, 1991, 1992, and 1993. This is because fiscal years end on September 30 meaning that when Bush was elected in 1988, the 1988 fiscal year had already ended more than a month earlier. And, the 1989 fiscal year would end just eight months after Bush was sworn in, having already been debated and planned under Reagan during late 1988. Thus, it only makes sense to "blame" the 1989&nbsp;fiscal year budget on Reagan, and the 1990 year on Bush.</p>
<p><strong>Reagan and G.W. Bush Are the Worst Offenders</strong><br /><br />So, using this analysis, we do find that Bush I was the least-bad offender with federal spending increasing only 2 percent from 1990 through 1993. That's one in favor of the GOP claims for being against big government.<br /><br />On the other hand, the top three worst offenders here are Republicans. As hard as it is to believe, there are still some people who think that Reagan cut the size of government, although Reagan was a big spender and laid the groundwork for the immense national debt we live with today.<br /><br />During Reagan's tenure, counting FY 1982 to &nbsp;FY 1989, federal spending increased 19 percent. And worst of all, George W. Bush oversaw an increase in federal spending of 46 percent during his tenure.<br /><br />We can compare this to an increase of 7 percent under Clinton and 4 percent under Obama, although, we'll likely have to assign the blame for 2016 and 2017 budgets to Obama. However, even with all the coming increases in federal health care spending that we'll be able to thank&nbsp;Obama for, it's unlikely he'll be able to match the spending levels signed &nbsp;into law by Bush II.<br /><br />I know that some people will complain and say that the 2009 spending increases &mdash; which included the massive bailouts in the wake of the 2008 crisis &mdash; should be blamed on Obama. But, that would require us to forget that Bush II was a supporter of TARP, the auto bailouts, and immense amounts of fiscal "stimulus" in general that came in 2009.</p>
<p>Even the most rudimentary Google search shows that Bush was very much in favor of the massive spending increases that came in 2009. Obama (and also surely McCain, had he won) would have done the same, but that doesn't change the fact that when given an opportunity to spend, the GOP grabs on to the opportunity with all its might.<br /><br />Moreover, even if we changed our analysis to blame FY 2009 on Obama, and included FYs 2009-2015 in such a way as to assign 2009 to&nbsp;Obama's tenure, we'd still only find an increase of 17.7 percent in federal spending during Obama's time, so far. This compares to an increase of 32 percent for Bush, which would then include FYs 2001-2008.<br /><br />We can fiddle with the measurements further, and including both election year and outgoing year for both. This means we'd be counting the increase from FY 2008 to FY 2009 and assigning that increase to Obama. Of course, we also then carry the same method to all other administrations. We find, though, that no single year upends our analysis, although by this other count, we do find the two parties are a bit more equal:</p>
<p><img src="http://static4.businessinsider.com/image/56bb3b7f2e526551008b631e-1236-895/screen shot 2016-02-10 at 8.30.03 am.png" alt="Screen Shot 2016 02 10 at 8.30.03 AM" data-mce-source="Mises Institute" /></p>
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<p>&nbsp;</p>
<p>In this case, Obama's spending growth was nearly 19 percent, and Bush II is at 33 percent.&nbsp;With&nbsp;a year to go, Obama&nbsp;may still have a chance at rivaling Reagan in terms of spending, although, it's unlikely he can match Bush II's profligacy.<br /><br />There are other ways we could measure this as well. What if we looked at how much the feds spent as a percentage of GDP under each president?<br /><br />If we do that and average up the years for each president's tenure, we get this:</p>
<p><img src="http://static2.businessinsider.com/image/56bb3bb32e5265bb008b631a-1176-702/screen shot 2016-02-10 at 8.30.54 am.png" alt="Screen Shot 2016 02 10 at 8.30.54 AM" data-mce-source="Mises Institute" /></p>
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<p>In this case, it looks like we finally nailed Obama. On the other hand, the three worst offenders here are Obama, Reagan, and Bush I. All three of them come in around 21 percent.<br /><br />Those presidents who avoided major recessions during their tenures naturally score the best here, because in "good" years, growth in the private sector tends to soften the perceived effect of government spending in this data. On the other hand, there's not much variation here, overall, suggesting that by this measure, the two parties are pretty much the same. I guess the GOP's motto could&nbsp;be "Vote GOP, we only gave you two out of the top three big spenders!"<br /><br />(Note: Keep in mind that government spending is included in GDP calculations, and one can &nbsp;increase GDP simply by increasing government spending. So, take this measure with a grain of salt.)<br /><br />The graph above assigns 2009 to Bush. But if we use a&nbsp;measuring method that assigns 2009 to Obama (measuring similarly with other presidents) we don't see much of a difference. In this case, Obama bumps up to 22 percent, while Reagan and Bush I remain at 21 percent:</p>
<p><img src="http://static4.businessinsider.com/image/56bb3be22e52651a008b6394-1268-822/screen shot 2016-02-10 at 8.31.54 am.png" alt="Screen Shot 2016 02 10 at 8.31.54 AM" data-mce-source="Mises Institute" /></p>
<p>Basically, you can slice and dice the numbers any number of ways, but it's hard to see how we come up with a scenario that makes Republican presidents look like guardians of the fiscal purse who wield their veto pens with gusto. Indeed, depending on how you measure it, Obama, Reagan, and Bush II are largely all peas in a pod.</p>
<p><strong>What About Congress?&nbsp;</strong><br /><br />"But wait!" the GOP partisans will say. "It's all Congress's&nbsp;fault." If it weren't for those Dems in Congress, Republicans would have slashed budgets."<br /><br />Even on its surface this is a weak argument since presidents have veto power, and never, to my knowledge, were any any of these budgets passed over the veto of a president, which would of course require a two-thirds majority in Congress. So, in essence, if the GOP ever has more than one-third a majority in either house of Congress, or if the party has the White House, it has veto power on the budget.<br /><br />But, if the pro-GOP&nbsp;reasoning holds any water, then we should find that periods where the GOP had control of both Congress and the White House would have been a period of budget slashing.<br /><br />Well, the GOP controlled both the White House and the House of Representatives from 2001 to 2007. The Senate was evenly divided from 2001-2003, but from 2003 to 2007, the GOP had total control of the White House and Congress.<br /><br />Did spending increase from 2003 to 2007? You bet it did. In fact, during that period, federal spending increased 8.4 percent in real terms. That's including the fiscal years of 2004-2008. If we slightly expand this period to include the period when the GOP had&nbsp;50% of the Senate from 2001-2003, then we find that for that six-year period, federal spending increased 17.7 percent<br /><br />In fact, it was during that period, in 2003, that the Bush administration dreamed up the idea of massively expanding Medicare to more heavily subsidize prescription drugs. It was the largest expansion of welfare since the Great Society, and it happened when the GOP had control of both the White House and the Congress. (Medicare is not self-financing, by the way. <a href="https://mises.org/blog/dont-worry-everyone-will-get-plenty-tax-funded-stuff-latest-budget-deal">It pays out more than it takes in</a>.)</p>
<p>We might also note that for six of Reagan's eight years, he enjoyed a Republican-controlled Senate (from 1981-1987), all the while racking up record-breaking deficits.&nbsp;</p>
<p>So, is a vote for the GOP a vote for less government spending, more fiscal restraint, and "personal responsibility." It's hard to see how one could possibly construe that from the historical record.</p>
<p>Another way to get GOP presidents off the hook, of course, is to blame the voters. That's not a terribly&nbsp;good political tactic, of course, but one would be correct to point out that a big reason the GOP doesn't slash budgets is because the voters don't want them to. Sure, many people claim to want smaller government, but as soon as the programs that benefit them directly, such as Social Security, Medicare, or military spending, are on the chopping block, the voters call their members of Congress, telling them to keep the money flowing.&nbsp;</p>
<p>This fact also illustrates how elections are useless in reforming the government if not preceded by an ideological change. The fact is that ideologically, Americans are greatly in favor of a big-spending government. The politicians who want to get elected are well aware of this, and act accordingly. If we want smaller government, we'd have to convince at least a sizable minority that it's a good thing. But until that changes, don't look for the next eight-year period to be much different from all the other ones in living memory.&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/fed-and-capitol-hills-very-dangerous-game-2016-1" >The Federal Reserve and Congress are playing 'a very dangerous game'</a></strong></p>
<p><a href="http://www.businessinsider.com/want-bigger-government-vote-republican-2016-2#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/555-phone-number-tv-movies-telephone-exchange-names-ghostbusters-2018-3">Why 555 is always used for phone numbers on TV and in movies</a></p> http://www.businessinsider.com/rand-paul-government-spending-is-out-of-control-2016-1RAND PAUL: Government spending is out of controlhttp://www.businessinsider.com/rand-paul-government-spending-is-out-of-control-2016-1
Fri, 22 Jan 2016 09:48:00 -0500Rand Paul
<p><img style="float:right;" src="http://static6.businessinsider.com/image/56a0fb77e6183e9d408bac16-2887-2165/rtr4weyy.jpg" alt="Rand Paul" data-mce-source="Reuters/John Sommers II" data-mce-caption="U.S. Senator Rand Paul (R-KY) formally announces his candidacy for president during an event in Louisville, Kentucky." data-link="http://pictures.reuters.com/Package/2C0408WGL19M3#/SearchResult&amp;ALID=2C0408WGL19M3&amp;VBID=2C0BX46BANI5&amp;POPUPPN=2&amp;POPUPIID=2C0408WG8EQT1" /></p><p><em><strong>US Sen. Rand Paul (R-Kentucky) is a 2016 presidential candidate.</strong></em></p>
<p>Last year, when the Republican Party gained control of both houses of Congress, the American people were promised that things would change. The American people were promised that the economy would improve &mdash; that President Obama and his reckless spending habits would be pinned down once and for all. <span data-term="goog_202296980"><span>One year later</span></span>, however, things do not appear to have changed at all.</p>
<p>Earlier this week, the Congressional Budget Office (CBO) <a href="https://www.cbo.gov/publication/51129" target="_blank">announced</a> that the deficit for this fiscal year will hit $544 billion &mdash; $130 billion more than expected &mdash; while the 10-year deficit is projected to climb over $1 trillion higher than previously forecast.</p>
<p>That&rsquo;s right: We&nbsp;are already over $18 trillion in debt &mdash; we already have a debt that is equal to our GDP &mdash; and yet our Republican-controlled Congress is still ready to continue spending more of our money at every turn.</p>
<p>Throughout my time in Washington, I have worked tirelessly to wake up Republicans and Democrats to the dangers of their reckless spending habits, but neither side is willing to face fiscal reality.</p>
<p>In the last decade, we have added nearly $10 trillion in new debt and the results have been far from stellar. Our labor force participation rate is sitting at a near-40-year low. Wage growth has remained stagnant, while real median household income has declined by over 7%.</p>
<p>What frustrates me the most about Washington&rsquo;s penchant for spending $7 million a minute is that there is clearly hundreds of millions of dollars' worth of pork barrel spending that should be removed from our list of expenditures. For example, we recently spent taxpayer money on everything from a $104 million subsidy for millionaires to live in public housing to $850,000 on a foreign made-for-T.V. cricket league in Afghanistan. I cannot imagine that anyone living outside the beltway would support such wasteful expenditures.</p>
<p>Although there is clearly plenty of waste within our budget, my Republican colleagues &mdash; including fellow presidential candidates Sens. Ted Cruz and Marco Rubio &mdash; refuse to cut even a penny.</p>
<p>This March, Cruz and Rubio wanted to <a href="http://www.nationalreview.com/corner/416056/do-ted-cruz-and-marco-rubio-think-we-can-raise-defense-spending-even-more-without" target="_blank">increase military spending</a> by $190 billion over the next two years. I proposed raising defense spending by exactly the same amount, but also proposed offsetting the hike with cuts to wasteful spending. Cruz, Rubio, and nearly every other Republican in the Senate voted against my amendment. Fiscal conservatism is apparently much easier to preach than to do.</p>
<p>The problem in Washington is that there is an unholy alliance between right and left. They come together to spend more of your money at every turn. Conservatives want more military spending and liberals want more domestic spending. As a result, they shake hands and agree to spend more on everything.</p>
<p>Last October, this secret alliance came together to introduce the Bipartisan Budget Act, a statute which aimed to suspend the debt limit until the end of President Obama&rsquo;s tenure and increase spending by $85 billion in just three years. It also proposed taking $150 billion from the Social Security trust fund &mdash; the trust fund that is projected to reach insolvency within 20 years &mdash; to fund other areas of the budget.</p>
<p><img src="http://static1.businessinsider.com/image/563b799e5afbd37f498b456b-800-526/house-passes-revised-defense-policy-bill.jpg" alt="The U.S. Capitol is pictured on the opening day of the 112th United States Congress in Washington, January 5, 2011. REUTERS/Jim Bourg" data-mce-source="Thomson Reuters" data-mce-caption="The U.S. Capitol is pictured on the opening day of the 112th United States Congress in Washington" /></p>
<p>When it came time to vote on the Bipartisan Budget Act, I was not shy in expressing my disapproval. In hopes of convincing my colleagues of the negative impacts that this legislation would have on our economy, I voiced my objections on the Senate floor until the wee hours of the morning.</p>
<p>Instead of thanking me for fighting for conservative principles until the bitter end, however, many of my colleagues cursed and yelled at me for wasting their time. In the end, only 34 of my Republican colleagues stood with me to restore fiscal sanity.</p>
<p>It is disappointing that Republicans would agree to any new spending, especially since there is plenty of pork barrel spending that can and should be cut. Unfortunately, however, wasteful spending is the common ground that the unholy alliance never ceases to agree upon.</p>
<p>The truth is, Republicans are just as fiscally irresponsible as Democrats. Conservatives may support lowering your taxes, but they are still willing to spend more of your money at every turn. Cutting taxes while increasing spending simply means that American workers will be taxed in a more discrete and worse way. It means that our borrowing will increase, which will lead to more debt, higher inflation, and less money in all of our pockets.</p>
<p>Unfortunately, both parties will continue to spend us into oblivion until we restrain them from doing so. That&rsquo;s why I have consistently advocated for a Balanced Budget Amendment to the Constitution. We need to make every Congressional representative swear an oath to balance the budget and ensure that it gets done.</p>
<p>Throughout my time in the Senate, I have also proven that I am serious about balancing the budget by laying out precisely what programs, departments, and expenditures I would cut in order to bring fiscal stability back to our nation's checkbook. Every conservative that pays lip service to reining in the debt should follow my lead. We can't afford for politicians to be "all talk." We need action, and we need it now.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/rand-pauls-undercard-debate-2016-1" >Rand Paul's decision to skip the undercard debate turned out to be a brilliant move</a></strong></p>
<p><a href="http://www.businessinsider.com/rand-paul-government-spending-is-out-of-control-2016-1#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/meaning-of-fake-news-and-make-america-great-again-steven-pinker-2018-3">Harvard professor Steven Pinker explains the disturbing truth behind Trump's 2 favorite phrases</a></p> http://uk.businessinsider.com/wef-report-11-countries-with-the-safest-banks-2015-10These are the 11 countries with the safest banks in the worldhttp://uk.businessinsider.com/wef-report-11-countries-with-the-safest-banks-2015-10
Sun, 27 Dec 2015 05:00:00 -0500Ben Moshinsky
<p><img class="center float_right" src="http://static2.businessinsider.com/image/56164d1cdd0895762b8b45e9-2104-1578/rtr3bj4d.jpg" alt="Gold Queen" data-mce-source="REUTERS/Eddie Mulholland" data-mce-caption="Britain's Queen Elizabeth tours a gold vault during a visit to the Bank of England in the City of London December 13, 2012." /></p><p>The World Economic Forum's recently-released Global Competitiveness Survey offers a bundle of indicators to show the health of a country's institutions.</p>
<p>One of those is the perceived&nbsp;safeness of banks.</p>
<p>WEF used its executive opinion survey to ask "in general, how do you perceive the soundness of banks?"</p>
<p>So the measure isn't based on any objective economic or accounting measure, but rather by the perceptions of the population. The countries are ranked from 1 (banks need more money) to 7&nbsp;(banks are generally sound).</p>
<p>The survey showed that people in the UK and US really don&rsquo;t trust their banking systems after the 2008 financial crisis. The UK was ranked 89 and the US came in at 49, below Honduras, Namibia and Peru.</p>
<p>We looked only at the 34 OECD (Organisation for Economic Co-operation and Development) countries, which are all considered relatively developed economies with democratic systems.</p><h3>11. Czech Republic — The Czech banking sector is unusual in that foreign-owned lenders dominate the industry, but consumers don't seem to mind, ranking them the 11th safest in the world.</h3>
<img src="http://static2.businessinsider.com/image/56164d1fdd0895762b8b45eb-400-300/11-czech-republic--the-czech-banking-sector-is-unusual-in-that-foreign-owned-lenders-dominate-the-industry-but-consumers-dont-seem-to-mind-ranking-them-the-11th-safest-in-the-world.jpg" alt="" />
<br/><br/><h3>10. Switzerland – Although it scrapes into the top 10, people are losing faith with Swiss banks. The country's centuries-old tradition of banking secrecy is being rolled back, while the Swiss National Bank lost $51 billion this year as it abandoned its cap on the Swiss franc.</h3>
<img src="http://static3.businessinsider.com/image/56164d1fdd0895762b8b45ec-400-300/10-switzerland--although-it-scrapes-into-the-top-10-people-are-losing-faith-with-swiss-banks-the-countrys-centuries-old-tradition-of-banking-secrecy-is-being-rolled-back-while-the-swiss-national-bank-lost-51-billion-this-year-as-it-abandoned-its-cap-on-the-swiss-franc.jpg" alt="" />
<br/><br/><h3>9. Slovakia — Much like in the Czech Republic, foreign banking groups dominate Slovakia's finance industry, making up 90%. Austrian and Italian banks are the biggest players.</h3>
<img src="http://static3.businessinsider.com/image/56164d1fdd0895762b8b45ed-400-300/9-slovakia--much-like-in-the-czech-republic-foreign-banking-groups-dominate-slovakias-finance-industry-making-up-90-austrian-and-italian-banks-are-the-biggest-players.jpg" alt="" />
<br/><br/><a href="http://uk.businessinsider.com/wef-report-11-countries-with-the-safest-banks-2015-10#/#8-israel--in-at-number-8-israel-hasnt-had-a-big-banking-crisis-since-1983-which-forced-the-government-to-step-in-the-state-still-remains-a-large-shareholder-in-many-private-banks-4">See the rest of the story at Business Insider</a> http://www.businessinsider.com/7-unbelievable-ways-the-government-wasted-your-money-in-2015-2015-127 unbelievable ways the government wasted your money in 2015http://www.businessinsider.com/7-unbelievable-ways-the-government-wasted-your-money-in-2015-2015-12
Tue, 22 Dec 2015 21:18:00 -0500Eric Pianin
<p><img style="float:right;" src="http://static1.businessinsider.com/image/567763622340f8b8008b70e2-1329-996/police us united states $100 dollar bills money counterfeit.jpg" alt="Police US United States $100 Dollar Bills Money Counterfeit" data-mce-source="REUTERS/Guadalupe Pardo" data-mce-caption="Police officers display counterfeit U.S. dollar bills during a news conference in Lima October 14, 2015." /></p><p>Congress&rsquo;s approval last week of $1.15 trillion of new spending and $622 billion of special tax breaks before most lawmakers had a chance to examine the fine print is a reminder that even with plenty of committee oversight the budget is a vast, unfathomable playground for waste and inexplicable government programs.</p>
<p>Government waste, of course, is in the eye of the beholder, and what&rsquo;s one man&rsquo;s vital government investment or research project is another man&rsquo;s boondoggle or government rip-off. Former Sen. Tom Coburn (R-OK) burnished his reputation as a deficit hawk by publishing an annual &ldquo;waste book&rdquo; of the 100 most egregious government expenditures &ndash; a document that is now being emulated by his successor in the Senate, Republican James Lankford of Oklahoma, and Sen. Jeff Flake (R-AZ).</p>
<p>&ldquo;What I have learned from these experiences is Washington will never change,&rdquo; Coburn wrote in his final report documenting what he considered $25 billion of wasteful spending in practically every major department and agency. &ldquo;But even if the politicians won&rsquo;t stop stupid spending, taxpayers always have the last word.&rdquo;</p>
<p>The targets are limitless, as Flake documents in his new &ldquo;Star Wars&rdquo; inspired waste book, &ldquo;The Farce Awakens.&rdquo;</p>
<p>A $1 million project involving monkeys on a treadmill, another $1.2 million to assess the effects of microgravity on sheep, $110 million spent on constructing buildings left empty in Afghanistan, $300,000 for a cheese heritage center, $5 billion for unneeded data centers, and on and on.</p>
<p>&ldquo;Despite the public ballyhooing over budget austerity, the government didn&rsquo;t come up short on outlandish ways to waste money in 2015,&rdquo; Flake wrote in his introduction. &ldquo;Like the monkeys on the treadmill, Washington politicians also ran in place trading familiar arguments in the seemingly never ending match of budget brinksmanship. But the stare down over whether or not to increase spending didn&rsquo;t last long.&rdquo;</p>
<p>There is an embarrassment of riches to choose from in picking seven good examples of the most wasteful or ridiculous government spending in 2015, thanks to Flake, Lankford and Steve Ellis of Taxpayers for Common Sense. And that means that any list will be highly subjective &mdash; and woefully incomplete. Still, some projects simply jump off the page and demand attention. Here are our choices:</p>
<ol>
<li><strong><img style="float:right;" src="http://static3.businessinsider.com/image/5679e1c1e6183e7c008b456a-967-725/f35 ff.png" alt="f35" data-mce-source="Lockheed Martin" data-link="http://www.lockheedmartin.com/us/products/f35.html" />The Star-crossed F-35&nbsp;</strong>&mdash;&nbsp;Heading any list of wasteful government projects and boondoggles is the&nbsp;F-35 Joint Strike Fighter. Years behind schedule and plagued with cost overruns and technical glitches, the effort has cost around $400 billion to date, making it the most expensive weapons effort in U.S. history. The program is expected to cost more than $1 trillion over its lifetime. But in the sprawling $1.1 trillion omnibus spending bill approved by Congress last week, lawmakers boosted the Obama administration&rsquo;s original $11 billion request to buy 57 planes by another $1.3 billion. The cash infusion means the Pentagon will be able to buy an additional 11 fighters, with all three military services slated to get more F-35s.</li>
<li><strong>Runaway Farm Subsidies</strong> &ndash; Two new agriculture income entitlement programs created as part of the 2014 farm bill to protect farmers from adverse shifts in prices seemed like a good idea at the time, given the relative stability of the commodities markets. But a senior Department of Agriculture official confirmed to Congress in September that the new programs &ndash; Agriculture Risk Coverage and Price Loss Coverage &mdash; were proving to be far more costly than promised. Given a significant drop in commodity prices since passage of the legislation, USDA currently projects that the government will be on the hook for about $6.5 billion in 2014 crop payments, largely to corn producers. That would be almost $3 billion more than the original projection &ndash; or 73 percent higher.</li>
<li><strong>Jazz Playing</strong> <strong>Robots </strong>&mdash; The Department of Defense complained until recently that it needed more operating funds, yet it managed to come up with $2 million to hire a team of musicians and researchers to develop robotic music computers to perform a trumpet solo and jam with human musicians. You heard that right. Jazz musician and academic Kelland Thomas is heading up a team of researchers at the University of Arizona, the University of Urbana-Champagne and Oberlin College. Thomas says his goal is to build a computer system that can be hooked up to robots that can play instruments, and that can play with humans &ldquo;in ways we recognize as improvisational and adaptive.&rdquo;</li>
<li><strong><img style="float:right;" src="http://static6.businessinsider.com/image/5679e234e6183e50008b4577-724-543/exclusive-usda-secretary-orders-update-of-animal-welfare-research-strategy.jpg" alt="U.S. Secretary of Agriculture Tom Vilsack delivers keynote remarks at the public launch of the U.S. Agriculture Coalition for Cuba while at the National Press Club in Washington, January 8, 2015. REUTERS/Larry Downing " data-mce-source="Thomson Reuters" data-mce-caption="U.S. Secretary of Agriculture Tom Vilsack delivers keynote remarks at the public launch of the U.S. Agriculture Coalition for Cuba while at the National Press Club in Washington" />Another Big Sop to Ethanol</strong> &mdash; Secretary of Agriculture Tom Vilsack created a $100 million program utilizing Commodity Credit Corporation funds to support the installation of ethanol blender pumps at gas stations that can handle high-blend ethanol fuels. Taxpayers already pay plenty to support the ethanol industry through a variety of subsidies and federal mandates requiring the use of biofuels. Vilsack, the former governor of Iowa &ndash; a major corn producing state &mdash; pushed his plan through in the face of opposition from Congress, which previously prohibited the Department of Agriculture from spending money for blender pumps.</li>
<li><strong>Exploring the Wonders of a Koozie</strong> &mdash; Two students from the University of Washington were given a $1.3 million grant from the National Science Foundation to investigate how a foam koozie keeps a can of cold beer cool on a hot day &ndash; findings that were published in Physics Today. University of Washington professor Dale Durran was quoted as saying, &ldquo;Probably the most important thing a beer koozie does is not simply insulate the can but keep condensation from forming on the outside of it.&rdquo;&nbsp; Hmm. That scientific insight cost taxpayers more than $1 million. &nbsp;</li>
<li><strong><img style="float:right;" src="http://static3.businessinsider.com/image/4fb28886eab8ea3179000006-620-465/uranium-3.jpg" alt="uranium" data-mce-source="http://en.wikipedia.org/wiki/File:HEUraniumC.jpg" />DOE&rsquo;s Uranium Enrichment Flop</strong> &mdash; A little known but costly Department of Energy project was closed down this year, but not before expending at least $280 million between 2012 and 2014 trying to develop a new commercial technology to enrich uranium fuel for use in nuclear power plants. From the beginning, the American Centrifuge Project was predicated on securing billions of dollars in government subsidies. But the project, based&nbsp;in Piketon, Ohio, was plagued by technological trouble and the federal government finally had to pull the plug in September. However, DOE is continuing to fund an offshoot of the research project that is run by Centrus Energy Corp., in Oakridge, Tenn.&nbsp; Centrus announced last week that Congress had authorized a total of $100 million in continued funding for its operations &ldquo;to maintain and advance American leadership in uranium enrichment technology.&rdquo;</li>
<li><strong>World&rsquo;s Most Expensive Training Program &ndash; </strong>President Obama&rsquo;s plan to arm and train thousands of &ldquo;moderate&rdquo; Syrian rebels to help in an allied campaign to crush ISIS turned out to be an embarrassing failure and had to be disbanded. The original proposal was to supplement U.S. air strikes with roughly 3,000 opposition fighters on the ground who could help the allied forces defeat ISIS. But by the time the Pentagon decided to abandon the program in October, the government had vetted, trained and equipped only 145 fighters, including just 95 who had returned to Syria to fight. That worked out to cost of roughly $2 million per trainee. The Pentagon insists the cost per trainee was much lower when you discount the cost of weapons and ammunition still in storage.</li>
</ol><p><a href="http://www.businessinsider.com/7-unbelievable-ways-the-government-wasted-your-money-in-2015-2015-12#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/how-jay-z-and-diddy-made-millions-off-of-cheap-alcohol-zack-omalley-greenburg-2018-3">How Jay-Z and Diddy used their fame to make millions off of 'cheap grapes'</a></p>